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