Bank of America has set aside $100m to cover future legal, consulting and other costs likely to be incurred as a result of the ongoing investigations into its mutual fund trading practices. This sum doesn't, however, include anything by way of any future settlement with investors.
Bank of America's Nations Fund is one of a number of units under investigation by New York State Attorney Eliot Spitzer's office. The investigation will not, however, put the bank off from attempting to further grow its welath-management businesses.
Not that the bank needs to worry about the odd $100m. It posted a 31% increase in third quarter profit last week. Net income came in at $2.92bn, fuelled by strong performances in the bank's mortgages and consumer businesses. Investment banking revenues were up too. Profit was up 33% at Bank of America Securities to $513m. Investment banking profit increased 32% to $399m and trading revenues were up 20% to $688m.
The bank's shares are up 17% this year.