In brief
The Treasury fined Bank of America $1.2 billion, including $750 million from the OCC, for failing to report more than $5 billion in suspicious transactions on 13 October.
Net income fell to $6.9 billion from $8.3 billion a year earlier, while revenue rose 3% to $30 billion.
Bank of America shares fell more than 8% in morning trading, while Morgan Stanley beat forecasts with profit up 6.5% to $4.9 billion.
- 2024Regulators first impose a consent order on the bank
- September 2026Federal Reserve raises interest rates for the first time since 2023
- 13 OctTreasury announces a $1.2 billion fine and a second consent order
- 14 OctBank reports third-quarter net income of $6.9 billion
The penalty
The US Treasury fined Bank of America $1.2 billion on Tuesday, 13 October, for violating anti-money-laundering and sanctions laws. Regulators said the bank did not properly report more than $5 billion in suspicious transactions, some of which pointed to Chinese money laundering networks and illegal financial flows along the southwestern US border. The total includes a $750 million penalty from the Office of the Comptroller of the Currency, the bank supervisor. A separate $11.6 million settlement with the Office of Foreign Assets Control covered sanctions breaches linked to Iran, Russia, drugs and global terrorism. The Treasury also imposed a second consent order that requires the bank to work with an outside party to find and report suspicious transactions it has not yet detected. Treasury Secretary Scott Bessent said that even the largest financial institutions are not above the law.
Third-quarter results
Net income fell to $6.9 billion in the third quarter from $8.3 billion a year earlier, a drop of 17%. The bank published its results on Wednesday, 14 October, less than 24 hours after the penalty became public. Without the fine, earnings per share would have been $1.08, below the $1.10 analysts expected. A bank spokesperson told AFP that the penalty would reduce earnings per share by 17 cents. Revenue rose 3% to $30 billion, though fixed income trading revenue fell 17% to $2.6 billion and investment banking fees dropped 11%. Net interest income grew 8% to $16.4 billion. Chief financial officer Alastair Borthwick told reporters on Wednesday that the bank had put thousands of employees on remediation work linked to a consent order first imposed in 2024.
“We staffed up overtime and we feel like we're meeting all the obligations in that consent order at this point.”
- Q3 2025
- 8.3 $ billion
- Q3 2026
- 6.9 $ billion
Data from the article text
Shares and rivals
Bank of America shares fell more than 8% in morning trading, and at one point the loss reached 9%. The stock had already slipped about 2.6% in after-hours trading on Tuesday after the Treasury announcement. Morgan Stanley beat forecasts, with profit up 6.5% to $4.9 billion and revenue up 12% to $20.3 billion, helped by equities trading that rose 41%. Its wealth management unit posted revenue of $9.1 billion and took in $232 billion of new client money, yet its shares lost more than 3% as fixed income trading fell 7%. BlackRock reached $15.5 trillion in assets under management after $205 billion of new inflows, and its shares rose nearly 4% before the open.
Wider market backdrop
The Federal Reserve raised interest rates in September for the first time since 2023, and the 10-year Treasury yield climbed to its highest level in almost two decades. Fixed income revenue has been weak across Wall Street since then. JPMorgan, which reported on Tuesday, recorded its first drop in bond trading revenue in more than two years. Bloomberg reported that regulators had pushed the bank to adjust a key compliance system to flag more suspicious transactions, and that the bank then found thousands of payments totaling $4 billion of activity it had missed. The bank's statement on Tuesday said it had already dedicated substantial personnel and resources to its remediation efforts.