Bank of America (NYSE:BAC) reported earnings of $6.2 billion in the third quarter. The company attributed the earnings increase to an accounting gain and the sale of a stake in a Chinese bank.
The company said that during the three month period it earned 56 cents per share, well up from the loss of $7.3 billion, or 77 cents per share that it reported during that same quarter last year. The results far surpassed analyst expectations that the bank would only earn 28 cents per share. A large portion of the banks income was made up from accounting gains of $4.5 billion and $1.7 billion due to drops in the value of its debt. It also made $3.6 billion from the sale of its stake in China Construction Bank. It recorded a $2.3 billion loss from its private equity business as the investments value dropped.
The results indicate in large the banks net strategy of lowering costs and getting rid of business that dont reflect the simpler banking model. The company announced during the quarter that it will axe 30,000 jobs as it trys to reduce expenses by $5 billion over the next three years.
Bank of America reported a $302 million loss from its investment banking and trading business. Revenue for the quarter dell 26 percent to $5.2 billion.
JP Morgan Chase & Co. (NYSE:JPM) were named the largest bank in the United States by assets following the earnings release. Bank of America which has $2.21 trillion in assets was over taken by JP Morgan Chase who currently has $2.28 trillion in assets.
Bank of America currently trades at $6.42 per share, a 6.47 percent increase on the day so far.