Bank of America shares fell more than 8 per cent to their lowest level since May after the lender reported a sharp drop in third-quarter profit and booked a $1.2 billion charge tied to a regulatory penalty over failures to detect potential money laundering.
Net income fell to $6.9 billion, or 91 cents a share, in the three months to the end of September, down from $8.3 billion, or $1.04, a year earlier, according to the bank’s results. The fine — unveiled the evening before the earnings release — stems from the bank’s failure to report more than $5 billion in suspicious activity to the US government and ranks among the largest penalties in US Treasury history.
A double hit on the bottom line
Even excluding the penalty, the quarter disappointed. Adjusted earnings of $1.08 a share missed Wall Street forecasts of about $1.10–$1.11, while revenue of about $30 billion came in roughly $600 million short of estimates. Sales and trading revenue fell 5 per cent to $5.1 billion as weakness in bond trading overshadowed record equities trading — a pattern also seen at rival lenders reporting this week.
The penalty adds to growing regulatory scrutiny of money-laundering controls at America’s biggest banks. Bank of America has been placed under a consent order requiring it to work with a third party to identify and report suspicious transactions that went undetected, following a 2024 order from the Office of the Comptroller of the Currency. Analysts warned the punishment would deepen negative sentiment and raise questions about expenses and how long the order lasts.
Rate fears compound the pressure
The results landed in an already jittery market. A hotter-than-expected September inflation reading reignited bets that the Federal Reserve could raise rates again, sending the S&P 500 to its worst day since July. For Bank of America, whose stock has slipped about 2 per cent this year, chief executive Brian Moynihan now faces the twin task of reviving trading revenues and satisfying regulators.
GlobeNews9’s earlier market coverage has tracked the split across Wall Street as doubts over AI-linked spending hit chip stocks even while the broader market held up. With the bank’s shares trading near five-month lows, investors will be watching whether October’s trading desks can steady the ship.
