© Reuters. FILE PHOTO: A Bank of America logo is seen in New York City, New York, U.S. January 10, 2017. REUTERS/Stephanie Keith/File Photo
(Reuters) – Bank of America will take a charge of about $1.6 billion in the fourth quarter as it phases out the use of a Bloomberg interest rate benchmark.
The non-cash and pre-tax earnings charge was triggered by the announcement by Bloomberg that they will stop publishing its short-term bank yield index in 2024, which the bank uses for some commercial loan contracts.
BofA said the $1.6 billion net impact is expected to be recognized back into its interest income in subsequent periods largely through 2026,
Bloomberg’s move to end index affected the accounting treatment of transactions executed using the index, the bank said.
Bank of America will report earnings on Jan 12.
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