Bank of America (BAC) reported Wednesday that its third-quarter net income rose to $2.5 billion, a jump of more than 600% from last year's $340 million.
The bank's results benefited from increases in equity investment income, net interest income and investment and brokerage income, as well as improved credit quality and lower expenses. Still, it did face headwinds like lower mortgage-banking income and adjustments to deferred tax assets related to U.K. corporate income tax rate reductions.
"This quarter, we saw good loan growth, improved credit quality and record deposit balances. Our customers and clients continue to do more business with us," said CEO Brian Moynihan, in a statement.
Nonetheless, banking analysts pointed out that BofA's mortgage banking results fell 50% from the prior quarter, along with total servicing income. Litigation expenses were more than $1 billion in the most-recent period, up from about $470 million in Q2, according to Sterne Agee.
On the other hand, capital markets "held up better than expected at $4.3 billion," which was down roughly 14% from the prior quarter and 6% from a year ago. Fixed-income trading declined 10% from Q2 and 20% from the same period of 2012, note analysts Todd L. Hagerman and Robert Greene.
Equities trading was "a relative bright spot," they add, up 36% from the prior year's period.
Global Wealth
BofA said its Global Wealth and Investment Management unit had revenue of $4.4 billion, up 8% from last year but 2% off last quarter's results.
Asset flows were $9.7 billion, a nearly 80% year-over-year growth rate. This marks the 17th consecutive quarter of positive flows, the bank says, and the highest third-quarter level since BofA merged with Merrill Lynch.
Total GWIM client balances were $2.28 trillion, of which $1.85 trillion were held in Merrill accounts.
