American companies aren’t especially known for their generosity to the UK Exchequer. Starbucks, Amazon and Google paid zero, £1.8m and £6m respectively in UK corporate taxes last year. By comparison, Bank of America looks like a golden goose from North Carolina. According to the bank’s third quarter results, released today, its markets business (the investment bank) paid $1.1bn in UK corporate taxes in the third quarter alone.
The UK tax bill drove Bank of America’s global markets business to a loss of $778m, versus a loss of $276m the previous year. Without it, BAML would have made a $531m profit.
Bank of America’s fixed income sales and trading business didn’t do too badly in the third quarter. Excluding accounting charges related to its own debt, fixed income revenues fell 19% year-on-year – less than the 26% decline at Citigroup, more than the 8% decline at JPMorgan.
In the first nine months as a whole, fixed income revenues at BAML were down 20%. Equities revenues rose 30% to partially compensate. However, the huge UK tax bill wiped out all the revenues made by the bank’s equities division.
Bank of America’s beneficence should go some way to helping out the British government, which is nurturing a deficit of around £12bn ($19bn) a month.