CHARLOTTE, N.C. _ Bank of America reported some of its best financial results in a decade on Monday, as the Charlotte company chipped away further at its expenses, a trend executives said is not going away.
In the third quarter, the second-largest U.S. bank by assets posted its largest pretax profits in 10 years, in part from a surge in trading business that also boosted revenues at some rival banks. But Bank of America's latest results also benefited from its ongoing focus on cost-cutting, with the company shedding more than 1,500 positions _ bringing it to its lowest employment level in eight years.
CEO Brian Moynihan, speaking on an earnings call with analysts, said Bank of America has continued to add sales positions while eliminating other jobs, such as back-office positions, through automation. More job cuts could be ahead, as executives Monday reiterated plans unveiled earlier this year to reduce annual noninterest expenses to about $53 billion by the end of 2018.
"As we look forward, we are driving responsible growth and maintaining discipline on costs," Moynihan said.
While job-cutting at Bank of America has slowed since the financial crisis, years of cuts since Moynihan became CEO in 2010 pushed the bank to a milestone in the third quarter: It now has fewer employees than it did before it bought Countrywide Financial in 2008 and Merrill Lynch in 2009.
On Monday, the bank reported 209,009 employees, a drop of more than 74,000 since Moynihan took over.
Those cuts have come as Moynihan has pushed to streamline a bank that ballooned into a coast-to-coast megabank after decades of acquisitions. Moynihan has also sought to reduce costs in an era of stubbornly low interest rates, which the Federal Reserve slashed in 2008 to help the U.S. recover from the financial crisis. Those low rates are good for borrowers but bad for banks' profit margins.
Bank of America's revenue in the quarter increased 3 percent, helped largely by higher sales and trading revenue. Fees from investment banking marked the best third quarter since the Merrill Lynch deal.
Earnings per share excluding accounting adjustments were 42 cents, beating the 33-cent average estimate of analysts surveyed by Bloomberg. The bank said its pretax net income of $7.3 billion was the highest in a decade.
Expenses in the third quarter fell 3.3 percent compared with the same quarter last year, to about $13.5 billion.
Bank of America becomes the latest large U.S. bank to report third-quarter results. Big banks began releasing their results Friday:
New York-based JPMorgan Chase & Co., the largest U.S. bank, said profits fell 7.6 percent from a year ago to $6.29 billion. New York-based Citigroup, the fourth-biggest U.S. bank, said it earned $3.8 billion in the quarter, down 11 percent from a year ago.
San Francisco-based Wells Fargo, the third-largest U.S. bank, said third-quarter profits dropped 3 percent to $5.6 billion compared with a year ago.
