America's No. 2 bank turned in uneven trading results. Fixed income revenue slid 17% to $2.55 billion, while the equities desk improved 10% to $2.51 billion. Investment banking fell 11% to $1.82 billion, though it came in better than expected beneath the surface, with M&A advisory fees down 19%, equity issuance up 9.1%, and debt issuance nearly 14% lower.
Total revenue landed just under $30 billion, missing the analyst consensus. By 9:59 a.m. in New York, shares of the Charlotte, North Carolina-based bank were lower by 8.2%, and they're down 9.9% year to date.
Across Wall Street, choppy markets have helped rivals' stock-trading units while higher rates have pressured fixed income. On Tuesday, Goldman Sachs and JPMorgan logged strong third quarter equity trading alongside softer bond revenue. At Citigroup, bond trading notched the strongest third-quarter showing in at least a decade, while Wells Fargo's provisions and net charge-offs topped analyst expectations.
The bank took a $1.2 billion non-tax-deductible hit for money-laundering and sanctions violations, which shaved 17 cents a share from net income. On Tuesday, the Treasury Department asserted that, in an attempt to safeguard revenue, the bank "effectively outsourced" significant compliance functions. Bank of America said the costs to fix the problems are already reflected in its expense base. Noninterest expenses climbed nearly 14% to $19.7 billion, and that figure includes the charge.
Trading results and legal penalties can hit a bank in the same quarter. Market Briefs covers earnings season free every morning.
The quarter offered another read on household finances as rising rates and the war in Iran kept gas prices high. The bank set aside $1.27 billion for potential loan losses, lighter than the $1.5 billion analysts expected. Net charge-offs dropped to $1.35 billion, below the $1.44 billion consensus.
Loan balances reached $1.23 trillion at quarter end, a 6.3% increase from a year earlier and in line with estimates. Lending remains a key focus with rates elevated.
This mix pairs sturdier equity trading with weaker fixed income, softer investment banking, and a hefty fine that shaved 17 cents from per-share profit. With the stock already down 9.9% this year and loans at $1.23 trillion, what happens next likely hinges on how fast BofA closes the compliance loop, how trading desks handle rate-driven swings, and whether consumer credit holds up as borrowing costs bite.
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