London
15 °C
Manchester
Glasgow
Dublin
Belfast
17 °C
Washington
32 °C
Denver
Atlanta
31 °C
Dallas
33 °C
Houston Texas
New Orleans
El Paso
Phoenix
Los Angeles
21 °C
1 °C
27 °C
26 °C
31 °C
Wall Street grills Bank of America over money laundering fine / Photo: © AFP/File
Wall Street grills Bank of America over money laundering fine
Shares of Bank of America tumbled Wednesday as the lender faced pointed questions from Wall Street analysts over a $1.2 billion regulatory settlement that led to a big earnings miss.
US authorities announced the penalty late Tuesday afternoon, charging that the bank failed to properly report more than $5 billion in "suspicious transactions," some related to national security risks.
Bank of America on Wednesday reported third-quarter profits of $6.5 billion, down 17 percent from the year-ago period. That translated into 91 cents per share, compared with expectations for $1.10 per share.
Near 1830 GMT, shares of the giant US lender were down around six percent after earlier falling nearly nine percent, a reaction that reflects investor surprise at the announcement.
During Wednesday's earnings conference call, BofA executives were asked "how it gets to this point" and whether there was a misunderstanding of the rules.
"At the end of the day, I think we have agreed to call this a settlement and move forward, and so we are doing it," said Chief Executive Brian Moynihan.
"We understand what they need us to do," he said. "We're deep in the process of remediating."
The settlement follows a December 2024 cease-and-desist order from US regulators that hit BofA for "unsafe or unsound practices," including failure to timely file suspicious activity reports.
Moynihan said the bank has made progress in efforts to pass regulatory muster since the 2024 order, adding thousands of employees to work on compliance with bank secrecy laws.
Later in the call, Moynihan was asked to address "reputational confidence" after BofA's earlier assurances suggested the financial hit would not be significant.
"We're very confident that we're on the course," the CEO said. "The key was to get agreement to what the resolution was, and that we have"
Moynihan said the company had redeployed some staff to fulfill compliance obligations, meaning it won't mean additional costs in the future for these functions.
"We are repositioning people from other units as we get the efficiencies to this and then that will let the head count drain down," he said.
jmb/mjf
E.Jones--SFF
