NEW YORK, Wed Oct 17, 2012 – Bank of America Corp eked out a third-quarter profit even after taking $1.6 billion of litigation charges, as the second-largest U.S. bank set aside less money to cover bad loans.
The results show Chief Executive Brian Moynihan is still haunted by acquisitions forged during the financial crisis. The bank last month agreed to pay $2.4 billion to settle claims that it hid crucial information from shareholders when it bought investment bank Merrill Lynch & Co at the height of the financial crisis.
Bank of America had already set aside some money for the settlement, but it said last month that the pact, a UK tax charge and an accounting charge related to the value of its debt would reduce third-quarter earnings by 28 cents per share.
To boost profits, the bank launched a broad cost-cutting program in 2011 that aims to eliminate $8 billion in annual expenses and 30,000 jobs.
But even with that project, called “New BAC,” noninterest expenses rose nearly 1 percent in the latest quarter to $17.54 billion.