Bank of America is due to report its third-quarter earnings after being hit with a $1.2 billion penalty by the US Treasury Department, putting fresh scrutiny on chief executive Brian Moynihan’s oversight of controls at the bank.
The charge, announced a day before the results, is expected to reduce net income by 17 cents a share. It adds an unexpected point of focus to an otherwise routine week of results from major US lenders.
Bank of America, the second-largest US bank by assets, is scheduled to publish its figures before the opening bell on Wednesday. Investors are expected to assess whether the penalty points to wider risk-management concerns under Mr Moynihan, who became chief executive in 2010.
Much of the early part of Mr Moynihan’s tenure was spent addressing mortgage-related abuses linked to the aftermath of the 2008 financial crisis. The Treasury action is likely to prompt questions about whether further control issues remain to be uncovered.
The development follows mixed performances from other large banks. JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo all reported results on Tuesday, with JPMorgan missing earnings-per-share and revenue estimates for the first time in years.
Bank of America earnings expectations
Analysts were expecting Bank of America to report earnings of $1.10 a share and revenue of $30.69 billion for the third quarter.
Net interest income was forecast at $16.53 billion, while trading expectations stood at $3 billion for fixed income and $2.8 billion for equities.
