Bank Of America Earnings Report: Bank Sees $6.2 Billion Profit

Bank of America earned billions of dollars in profits last quarter, even as banking officials expressed concern recently about the effects of new regulations on their bottom line.

The bank reported third quarter gains of $6.2 billion, compared to a $7.3 billion loss during the same quarter last year. The boost in profits came largely from an accounting gain and the pre-tax benefits from the sale of its stake in a Chinese bank.

(UPDATE: Reuters reports that Bank of America ceded its ranking as the largest bank by assets to JPMorgan Chase. Bank of America is now the second largest bank).

The increase in profits comes after Bank of America roiled customers by announcing that it will start charging customers $5 per month to use their debit cards for purchases in 2012. Shortly after the bank announced the fee, Bank of America CEO Brian Moynihan defended it, saying that the bank "has a right to make a profit."

Moynihan and other banking officials have said that they need to start charging fees on debit cards and checking accounts for once-free services to recoup the revenue they expect to lose as a result of financial reform regulations -- including a cap on the debit card swipe fee banks charge merchants -- passed as part of the Dodd-Frank act.

Bank of America isn't the only bank adding new fees. Wells Fargo announced in August that it would test a $3 debit card fee this fall, while Citibank said earlier this month that it would start charging certain customers a $20 fee for low account balances.

President Barack Obama criticized the banks for the slew of fees in an interview with ABC News earlier this month, saying that they don't "have some inherent right just to, you know, get a certain amount of profit" if their "customers are being mistreated."

"Banks can make money," he said in the interview. "They can succeed, the old-fashioned way, by earning it."

The fees are already pushing some customers away from traditional banks. The nation's largest credit union reported that the volume of new account openings was more than 20 percent above normal the weekend after Bank of America announced the debit card fee.

Comments

[Tierce]

04:38 PM on 10/20/2011

Glad someone is making money these days. Now if there was a balance that made everyone a living, that would be even greater.

[GaspingForAir]

10:34 PM on 10/19/2011

I guess I'm not allowed to post the same content in two locations. Sorry for the repeat but this bears repeating:

I was emailed a notification from Wells Fargo that I had to dig a bit to find. They aren't just adding a $3 monthly charge for debit cards now. They are adding a $15 monthly charge for accounts that don't carry a $5000 or $7500 balance, depending. There was a third alert too but it didn't apply to me so I didn't note the details. Fees start in November 15th.

[jufrgs]

04:59 PM on 10/19/2011

How many foreclosed homes did it sell this quarter?

[vippy]

02:09 PM on 10/19/2011

This takes the cake - they are about to go bankrupt! The Federal Reserve and Bank of America Initiate a Coup to Dump Hundreds of Billions of Dollars of Losses on the American Taxpayer on Oct 19, 10:38 AM said: @Maya: http://www.zerohedge.com/contributed/federal-reserve-and-bank-america-initiate-coup-dump-hundreds-billions-dollars-losses-ame

[behavingbadly]

02:01 PM on 10/19/2011

Profit from what?

[Pod accountant]

12:09 PM on 10/19/2011

This is a smokescreen. BofA is in real trouble and now the taxpayers are potentially on the hook for $75 Trillion dollars of toxic derivatives. Read this story linked below.
http://www.bloomberg.com/news/2011-10-18/bofa-said-to-split-regulators-over-moving-merrill-derivatives-to-bank-unit.html
Excerpt:

Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation.

The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.

[vippy]

02:11 PM on 10/19/2011

73 trillion derivatives to be exact and that compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.

[Cindy Tregan]

11:25 AM on 10/19/2011

Why doesn't Huffpo have a follow-up story on what happened to the people who were arrested for trying to close their BoA accounts?

[burthurt]

11:04 AM on 10/19/2011

They made a profit they must be crooks

[behavingbadly]

02:02 PM on 10/19/2011

Profit from what?

[billpoll74]

10:44 AM on 10/19/2011

More of the Class Warfare junk from the Obamination Campaign supported by Huffington Post. $6,000,000,000 sounds like a BIG amound to make but that company is owned by a thousands of average folks like me - who have a (very) few BoA stocks in Mutual Funds on which I will depend on for retirement (other than Social Security and Medicare) . So, considering there are about 10 billion outstanding shares of BoA, I appreciate the fact that BoA is making a profit and is paying the salaries of thousands of people who will likewise depend on the company's profits for their work and retirement. Yes - the upper execs of BoA get salaries in the millions but they run a BIG company with a lot of responsibility. The politicians run a big company also, but their only responsibility seems to be to get reelected by buying votes with the working man's money.

[DannyMcDance]

03:09 PM on 10/19/2011

Stop, you're making too much sense.

[LeslieTS1]

10:41 AM on 10/19/2011

Its not that they shouldn't make a profit its that they can charge you more to make that profit. We don't have that option as working people or people on a fixed income. So we get less food,less gas to go anywhere or maybe are unable to pay that bill on time. Gas prices drive you crazy the prices go down slowly for a couple months and right back in a week even higher.Its like they're playing games with us or maybe the CEO needs a 10th new car or 6th new home or a trip around the world.

[cnrventures]

10:36 AM on 10/19/2011

The profit ALL came from the sale of an asset (Chinese Bank) that was paid for by "borrowing money". The "PROFIT" was actually a wash and only a bookkeeping profit as the money was the cause for the deficit previously. I guess those business courses you guys took didn't sink in. I do not endorse or even agree with B of A (the bank that started announcing loans for illegals in 2007) but Keep the conversation legitimate.

[jameslancaster5]

10:36 AM on 10/19/2011

Unbridled greed. It's the cancer on the soul of America today. And because it also fuels the coffers of political candidates, it will continue to spread its venom via a contribution-dependent Congress and White House. We MUST have campaign finance reform.

[burthurt]

11:06 AM on 10/19/2011

Then the Union bosses wouldnt have anyone to go to Tahiti with .

[DannyMcDance]

03:10 PM on 10/19/2011

What are you talking about? You are the person who yells greed whenever anyone has more than you. Get a grip.

[builderman55]

10:34 AM on 10/19/2011

Read this carefully--it is from the blog, Naked Capitalism. Bank of America may be in a death spiral and has just made a $73 TRILLION move of derivatives to a taxpayer insured account so that if they fail, the taxpayer is on the hook-AGAIN. here's the blog piece: This changes the picture completely. This move reflects either criminal incompetence or abject corruption by the Fed. Even though I’ve expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail. Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral. It’s well nigh impossible to have an orderly wind down in this scenario. You have a derivatives counterparty land grab and an abrupt insolvency. Lehman failed over a weekend after JP Morgan grabbed collateral."

[Henry Garman]

01:12 PM on 10/19/2011

So why isn't this newsworthy item on the first page of Huffington? It's one of the biggest new stories of the day. Anybody awake at helm of this website? Hello? Hello? Anybody there? Calling the Huffington Post!! Hello? Hello? Please Reply. Anybody there? Hello? Hello?

[vippy]

02:12 PM on 10/19/2011

Yep, read a while back the big bailout by Obama is still in the works under the guise of bringing jobs to us.

[danno1400i]

10:30 AM on 10/19/2011

i am all for capitolism but this type of profit is obsene when the rest of the country is suffering. i do however agree with eliminating the loopholes these companies and the millionairs are taking advantage of, when the 99% have to carry the load. just like the oil companies, quarterly profits are in the billions, and every time the public turns around, they are coming up with every excuse under the sun to raise gas prices

[rkeeeballs]

10:29 AM on 10/19/2011

That's why I love my credit union !...Big banks...Bite Me !