Bank of America has reported a big drop in profits due to a multi-billion dollar settlement with U.S. authorities, according to BBC News.

Net profit for the three months to the end of September was $168mln, down from $2.5bn a year earlier. Total revenue was $21.4bn.

The huge drop in profits was due to a previously announced $5.3bn mortgage-related settlement with the Department of Justice and other federal agencies.

Most areas of the business improved profitability compared with a year ago.

"We saw solid customer and client activity and improved profitability in most of our businesses relative to the year-ago quarter," said the bank's chief executive Brian Moynihan.

The bank's property business posted a loss of $5.2bn, compared with a loss of $990mln a year earlier.

Profits at the asset management arm rose slightly to $813mln, while those at the global banking division rose by a quarter to $1.4bn.

The global markets business turned a loss of $875m to a profit of $769m.

On Tuesday, rival JP Morgan reported a profit of $5.6bn for the quarter, while Citigroup posted a $3.4bn profit.