Global Finance News
14 Oct 2026, 15:15
Bank of America Falls 7.6% as $1.2 Billion Regulatory Charge and Trading Weakness Overshadow Higher NII
Bank of America (NYSE: BAC) shares fell about 7.6% after the bank reported third-quarter 2026 net income of $6.9 billion, or $0.91 per diluted share, down from $8.3 billion, or $1.04 per share, a year earlier. Results included a $1.2 billion regulatory settlement charge that reduced EPS by $0.17. Excluding the charge, adjusted net income was $8.1 billion and adjusted EPS was $1.08.
Revenue increased 3% year over year to $30.0 billion, supported by stronger net interest income and asset management fees. Net interest income rose 8% to $16.4 billion, while net interest yield improved by 15 basis points to 2.16%.
However, capital-markets performance was softer. Investment banking fees declined, while sales and trading revenue fell 5% to $5.1 billion. FICC revenue dropped 17% to $2.6 billion, partially offset by an 11% increase in equities revenue to $2.5 billion.
Expenses also increased sharply because of the settlement. Noninterest expense rose $2.4 billion to $19.7 billion and the reported efficiency ratio deteriorated to 66%. Excluding the regulatory charge, adjusted expense was $18.5 billion and the adjusted efficiency ratio was 62%.
Elsewhere, the balance sheet remained healthy. Average deposits increased 2% to $2.02 trillion and average loans rose 6% to $1.23 trillion. Credit costs were relatively stable, with provision for credit losses of $1.3 billion and lower net charge-offs compared with both the prior year and previous quarter.
The 7.6% decline appears to reflect the combination of the sizeable regulatory settlement charge, weaker investment banking and fixed-income trading revenue, and higher reported expenses, which outweighed solid net interest income growth and strength in wealth management and equities.
Bank of America (NYSE: BAC) shares fell about 7.6% after the bank reported third-quarter 2026 net income of $6.9 billion, or $0.91 per diluted share, down from $8.3 billion, or $1.04 per share, a year earlier. Results included a $1.2 billion regulatory settlement charge that reduced EPS by $0.17. Excluding the charge, adjusted net income was $8.1 billion and adjusted EPS was $1.08.
Revenue increased 3% year over year to $30.0 billion, supported by stronger net interest income and asset management fees. Net interest income rose 8% to $16.4 billion, while net interest yield improved by 15 basis points to 2.16%.
However, capital-markets performance was softer. Investment banking fees declined, while sales and trading revenue fell 5% to $5.1 billion. FICC revenue dropped 17% to $2.6 billion, partially offset by an 11% increase in equities revenue to $2.5 billion.
Expenses also increased sharply because of the settlement. Noninterest expense rose $2.4 billion to $19.7 billion and the reported efficiency ratio deteriorated to 66%. Excluding the regulatory charge, adjusted expense was $18.5 billion and the adjusted efficiency ratio was 62%.
Elsewhere, the balance sheet remained healthy. Average deposits increased 2% to $2.02 trillion and average loans rose 6% to $1.23 trillion. Credit costs were relatively stable, with provision for credit losses of $1.3 billion and lower net charge-offs compared with both the prior year and previous quarter.
The 7.6% decline appears to reflect the combination of the sizeable regulatory settlement charge, weaker investment banking and fixed-income trading revenue, and higher reported expenses, which outweighed solid net interest income growth and strength in wealth management and equities.
