BofA 3Q profits plunge, still beating expectation

Bank of America, the U.S. second largest lender, said on Wednesday its profits for the third quarter fell sharply by 95 percent on litigation expenses, but still beating the market expectation. The bank's net income fell to 340 million dollars, or a fraction of a penny per diluted share, before paying preferred dividends in the third quarter from 6.2 billion dollars, or 56 cents per diluted share, a year earlier, according to a statement from the firm. The markets had expected a loss of 7 cents per share. The bank posted a 33-million-dollar net loss on results applicable to common shareholders. Revenue dropped 28 percent to 20.4 billion dollars before adjustments. The bank said, the third quarter earnings were negatively impacted by 1.9 billion dollars of charge related to the improvement in the company's credit spreads, 1.6 billion dollars for total litigation expense, including a charge for the previously announced settlement of the Merrill Lynch class action litigation, and a charge of 0.8 billion dollars related to a tax expense cost. Together, these three items totaled a negative 28 cents per share. The bank last month agreed to pay 2.43 billion dollars to settle the class-action lawsuit related to its acquisition of Merrill Lynch during the financial crisis. "Our strategy is taking hold even as we work through a challenging economy and continue to clean up legacy issues," Brian T. Moynihan, the bank's chief executive, said in a statement. But there were also improvements in the quarter relative to the year-ago, including improved credit quality across most major portfolios, increased sales and trading revenue (excluding impact of DVA), higher mortgage banking income and increased investment banking income.