Bank of America profit hit by $1.2 billion anti-money laundering fine

• Sales and trading revenue fell 5% to $5.1 billion while investment banking fees dropped 11% to $1.8 billion, with BofA slipping from third to fourth place in global investment banking rankings for the first nine months of 2026
• The $1.2 billion anti-money laundering fine represents the third-largest penalty in U.S. Treasury history and follows a 2024 consent order requiring BofA to address compliance shortcomings
• Regulators placed BofA under a consent order requiring third-party assistance to identify and report suspicious transactions that went undetected, likely raising concerns about expenses and duration of oversight

Summary

Bank of America reported third-quarter results that missed profit estimates, posting net income of $6.9 billion (91 cents per share), weighed down by capital markets weakness and a significant regulatory penalty. Excluding the regulatory charge, adjusted earnings were $1.08 per share.

Regulatory Penalty:

The bank disclosed a $1.2 billion charge related to anti-money laundering failures. The fine, which includes the third-largest penalty in U.S. Treasury history, stems from BofA's failure to report over $5 billion in suspicious activity to the U.S. government. Regulators imposed a consent order requiring the bank to work with a third party to identify and report previously undetected suspicious transactions. This follows a 2024 consent order from the Office of the Comptroller of the Currency addressing similar deficiencies.

Business Performance:

• Sales and trading revenue fell 5% to $5.1 billion, driven by weakness in fixed income, currencies, and commodities
• Investment banking fees declined 11% to $1.8 billion, below the bank's projected 10% drop
• BofA slipped to fourth place in the global investment banking league table for the first nine months of 2026, down from third position a year earlier

Market Context:

Capital markets momentum slowed after a strong first half of 2026, amid a prolonged bond market selloff that pushed yields to multi-decade highs globally. The bank has been working with U.S. regulators since late 2023 to overhaul its anti-money laundering safeguards.

Analysts warned the penalty could increase negative sentiment and raise concerns about ongoing expenses and the duration of regulatory oversight.