Bank of America Breaks Almost Even Despite Big Settlement
Bank of America broke roughly even in its third quarter earnings, despite paying part of the massive, more than $16 billion settlement with the federal government over mortgage fraud that helped spur the financial crisis.
Without $5 billion in settlement costs on the books this quarter, Bank of America would have more than doubled its net income from the same period last year. As it is, the bank still earned a little over $100 million.
CEO Brian Moynihan described that as a positive step.
“We’re not suggesting that we want to incur litigation costs going forward,” Moynihan told analysts on an earnings call. “But what this demonstrates is how much progress we’ve made behind the noise of the significant legal settlements.”
After paying out dividends, Bank of America lost one cent a share, far less than the nine cents analysts expected.
Sales and trading revenue went up nine percent, and the bank saved more than $1 billion on non-legal expenses, compared to the same time last year. Much of that reflects dramatic cuts to its workforce. Bank of America has laid off about 60,000 employees in the past five years.