Bloomberg News

BofA Trading Improved From Third Quarter, Moynihan Says

December 07, 2011

(Updates shares in the seventh paragraph.)

Dec. 6 (Bloomberg) -- Bank of America Corp.’s investment banking results have improved after trading revenue plunged more than 70 percent in the third quarter, said Chief Executive Officer Brian T. Moynihan.

“We’ve seen better results so far in the fourth quarter and we’ll see how we finish the year,” Moynihan said today at a conference in New York. Trading revenue at the Charlotte, North Carolina-based lender dropped to $1.07 billion in the three months ended Sept. 30, excluding an accounting gain, on lower fixed-income, currency, commodities and equities returns.

Bank of America’s markets division, run by co-Chief Operating Officer Thomas K. Montag, posted its first loss in the third quarter since the takeover of Merrill Lynch & Co. in 2009. Stock and bond markets were roiled by Standard & Poor’s downgrade of the U.S. government’s debt rating and investor concerns over deteriorating government finances in Europe.

European Union leaders will meet this week in the latest attempt to resolve the continent’s financial crisis. The S&P 500 Index has gained 11 percent since Sept. 30 after plunging 14 percent the prior three months, the biggest drop since 2008.

Surpassing the third quarter “wouldn’t be a hard standard to overcome,” Moynihan said. “The ebbs and flows of Europe lock the markets and move the markets around. We’ve still got a lot of work to do to get back to a relatively normal capital markets environment.”

Capital Levels

The bank said today that its capital levels are “well above” the minimum required by regulators and will improve this quarter with the sale of a Canadian card unit and 10.4 billion shares of China Construction Bank Corp., as well as an exchange of preferred securities for common stock and senior debt.

Bank of America fell 1 cent to $5.78 at 4:15 p.m. in New York. The company has dropped by more than 50 percent this year amid rising costs tied to soured mortgages.

The investment-banking division had trading losses on 20 days in the third quarter, led by a single-day drop of $119 million, compared with three losing days in the second quarter and a perfect trading record in the first three months of 2011.

--With assistance from Michael J. Moore in New York. Editors: Dan Kraut, William Ahearn

To contact the reporters on this story: Hugh Son in New York at hson1@bloomberg.net; Noah Buhayar in New York at nbuhayar@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net.


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