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BofA posts $7.3B loss in 3Q
- Adam O’Daniel, Staff Writer
Bank of America Corp. lost $7.3 billion in the third quarter as it took a one-time charge to its debit- and credit-card business and announced a major overhaul to its line of consumer banking products.
The loss of 77 cents per diluted share is attributed to a $10.4 billion goodwill impairment charge related to the bank’s card business. Charlotte-based BofA (NYSE:BAC) says the one-time charge stems from expected future losses from reduced fee revenue as mandated by the federal financial-overhaul legislation this summer. Investors expected the charge after the bank said in July it anticipated the adjustment would be made during the third quarter.
Analysts polled by Thomson Reuters anticipated a profit of 16 cents per share on $27 billion in revenue.
Excluding the one-time charge, BofA earned $3.1 billion, or 27 cents per diluted share, during the third quarter. Last year, BofA lost $1 billion or 26 cents per diluted share, during the same period.
The latest results come from $26.9 billion in total revenue, up from $26.4 billion a year ago. BofA’s net interest income in the latest quarter rose to $12.7 billion from $11.8 billion a year earlier. Noninterest income fell to $14.3 billion from $14.6 billion a year ago. The bank attributes the decline to lower service charges, reduced trading-account profits and lower gains on sales of debt securities.
BofA shares reacted to the news by dropping 4.4 percent in trading Tuesday to close at $11.80 per share. Shares closed Monday at $12.34.
On Tuesday morning, BofA also announced more changes to its consumer-banking business. To make up for lost revenue related to financial-reform laws and revenue lost when the bank stopped charging overdraft fees this summer, BofA is shifting to a business model that charges customers basic fees for deposit accounts and related products..
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