Bank of America Corp (NYSE:BAC) said Thursday it is taking a $400 million charge in the third quarter, as the second-largest U.S. lender braced for the end of probes into foreign exchange dealings.
In a statement, the Charlotte, North Carolina-based bank said its quarterly report on Form 10-Q will reflect the adjustment.
Bank of America: Regulators faulted systems and controls
Last month, Bank of America Corp (NYSE:BAC) unveiled its third-quarter results, posting losses of 1 cent per share on $21.4 billion in revenue, against analysts’ expectation of loss of 9 cents per share on $21.33 billion in revenue. The bank’s third quarter losses stem from the recent settlement with the Department of Justice. The DoJ settlement was $5.3 billion pretax or 43 cents per share after tax.
In a statement issued Thursday, Bank of America Corp (NYSE:BAC) said U.S. regulators faulted systems and controls for currency trading and called for fines and remedial actions in draft document sent late last month. The bank said that talks accelerated after it reported quarterly results in mid-October. The second-largest U.S. lender is in advanced discussions with the Fed and U.S. Comptroller of the Currency, reports Bloomberg citing people familiar with the matter.
Regulators in the U.K. and U.S. are reportedly preparing to levy fines on at least a half a dozen firms after probing allegations they manipulated the $5.3 trillion-a-day currency market. Authorities on three continents have been looking into allegations over rigging of currency markets.
The U.K. Financial Conduct Authority is also reportedly preparing to levy fines ranging from 225 million pounds ($358 million) to 250 million pounds against six other banks in the first settlements from its probes as soon as next week.
Citi restated its Q3 results
Last week, Citigroup Inc. (NYSE:C) slashed its third-quarter earnings by $600 million due to ‘rapidly evolving regulatory inquiries and investigations’ over alleged manipulation of foreign exchange markets. In its regulatory filing, Citigroup revealed that it’s facing a U.S. criminal probe into the bank’s foreign exchange business. The bank had to enhance its third-quarter legal costs following investigations and “very recent communications with certain regulatory agencies related to previously disclosed matters”.
Citigroup Inc. (NYSE:C) is one among six major banks that are expected to settle with Britain’s Financial Conduct Authority by mid-November for alleged manipulation of forex markets. A Reuters report quoting knowledgeable sources indicated the banks are aiming to settle for a total of around 1.5 billion pound sterling, or $2.42 billion.