Bank of America profit rises 15 percent on lower costs

Bank of America profit rises 15 percent on lower costs

Net income attributable to common shareholders rose to $5.12 billion in third quarter ended September 30 from $4.45 billion in the year-ago period.

Bank of America, the second-largest USA bank by assets, reported a 15% rise in quarterly profit as the lender kept a tight leash on costs and benefited from higher interest rates. Berkshire Hathaway took a $11.5 billion investment gain earlier this year when it converted preferred shares into common stock. The average estimate of 26 analysts surveyed by Bloomberg was for per-share profit of 46 cents.

Total revenue rose less than 1% to $21.8 billion from a year earlier, slightly below analysts' expectations of $21.9 billion.

The bank also kept a tight leash on costs.

It becomes the latest bank to report third-quarter results. Since then, Mr. Buffett has publicly praised Bank of America chief Brian Moynihan and said his firm plans to be a shareholder for a long time. Citigroup said net income rose 8 percent to $4.13 billion, or $1.42 a share.

Bank of America benefited from Federal Reserve interest rate increases, which allowed it to increase the amount it charges customers for loans. Global markets business revenue fell due to weak trading that is hurting the entire sector.

BofA's non-interest expenses fell 2.5 percent to $13.14 billion in the third quarter. The lender has spent $70 billion on legal bills since the financial crisis - more than any other US bank - including $30 billion on mortgage putbacks. Mr. Moynihan has made cost cutting a key tenet of his business strategy and previous year promised to cut $5 billion in annual expenses by 2018.

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