New York (AP) – Bank of America Merrill Lynch on Wednesday announced a dip in third-quarter earnings due to a $ 2.1 billion charge due to asset depreciation and litigation in the United States. real estate but has nevertheless done better than expected.
Net income fell 21.3% to $ 5.27 billion, but once reported per share and excluding exceptional items, it stands at 75 cents, well above the 51 cents expected on average by financial analysts.
Profitability suffered from the upcoming end of a joint venture in services offered to traders and legal fees to settle a real estate dispute, says the bank.
Apart from these two pitfalls, the activity of the second largest US bank in terms of assets has increased, despite a low interest rate environment, geopolitical uncertainties and trade tensions that cool the business community and freeze investments.
Turnover rose 0.36 percent to $ 22.8 billion, up from $ 22.79 billion.
More significant: Bank of America recorded a 2.4% increase in its net interest margin in retail banking, thanks to a 7% increase in loans granted and 3% in deposits.
Charlotte, NC is one of the US banks most exposed to interest rate movements.
Thus, the lowering, in mid-September, by the Federal Reserve (Fed) of its key rate in a range between 1.75% and 2% has caused fear of erosion margins Bank of America because borrow money becomes less and less expensive.
On Wall Street, the stock gained 1.58% around 11:30 GMT in the electronic exchange of pre-session, investors seem relieved to see that the bank had resisted the environment of low interest rates.
"In a modestly growing economy, we focus on what we have control of," said Brian Moynihan, the CEO, quoted in the statement.
One of the highlights of the past quarter was also the merchant bank. Bankers' commissions advising companies in different transactions – mergers and acquisitions, bond issues or IPOs – have soared, leading to an 8% increase in the income of this division.
The revenue generated by traders has also increased, of the order of 7%, said the bank whose first shareholder, Warren Buffett, via its holding Berkshire Hathaway, wants to raise its stake above the critical threshold of 10%.
Mr. Buffett currently owns 10% of the capital but needs the green light from the Fed to go beyond.
afp / rp
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