Bank of America Corp. said Tuesday that its profits rose more than 30 percent in the third quarter, driven by across-the-board gains in the bank’s major businesses.
Net income totaled $2.92 billion, or $1.92 per share, in the July-September period, up from $2.24 billion, or $1.45 per share, in the third quarter of 2002.
The gains exceeded Wall Street’s expectations. Analysts surveyed by Thomson First Call projected the bank’s profit at $1.69 a share.
In midday trading, shares changed hands at $82.20, up 46 cents, on the New York Stock Exchange.
“Deeper customer relationships and better retention are fueling our strong revenue growth and record profits this quarter,” Ken Lewis, chairman and chief executive, said in a statement accompanying the report.
During the quarter, the Charlotte, N.C.-based bank put $100 million in reserve to fund the ongoing investigation of its Nations Funds mutual fund business. The bank said it also increased its litigation reserve by $75 million to cover other cases.
In response to an analyst’s question, Bank of America vice chairman and chief financial officer Jim Hance said he was not able to predict how long it would take to put the mutual funds investigation behind them.
“I don’t know when it will be resolved. I wish we had a feel for it,” he said on a conference call after the results were released. “As it widens, it looks like it could go longer.”
Hance said the probe has not decreased the bank’s interest in the wealth-management business line.
“It has encouraged us to look more in depth, which is what we’re doing,” he said. “We see it as a natural opportunity for our business and our customers. And we are still too small in it.”
Last week, Bank of America said it will establish a restitution fund for shareholders of its Nations Funds who may have lost millions of dollars because of alleged improper trading that gave a hedge fund advantage over other investors.
The hedge fund, Canary Capital Management LLC, and its managers agreed to pay $30 million in restitution for profits generated from improper trading, plus a $10 million penalty to settle allegations lodged by New York Attorney General Eliot Spitzer.
Lewis said that the third-quarter results were driven by deposit and loan growth, strong investment banking and trading results, and improved mortgage and card revenues.
Net income for the first nine months was $8.08 billion, or $5.31 a share, up from $6.64 billion, or $4.22 a share, in 2002.
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