Bank of America profit beats expectations

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Bank of America profit beats expectations

Bank of America  profit beats expectations
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Bank of America has made its first quarterly profit since last summer.

The largest US bank in terms of assets said its net income increased to $2.83 billion dollars from $2.81 billion a year earlier.

That was three times what analysts has forecast.

Much of that profit was due to strong investment banking results from Merrill Lynch.

Bank of America was widely criticised for paying too much when it controversially bought Merrill Lynch at the height of the financial crisis.

In a further sign of US economic recovery the bank said it had set aside less money to cover bad loans.

Industry observers took that to mean borrower defaults may be levelling out after rising for nearly two years.

However, Bank of America’s shares fell, along with the rest of the sector after Goldman Sachs was charged with fraud by regulators at the US securities regulators.

A Goldman vice president, Fabrice Tourre, who the SEC said was principally responsible for creating the product, was also charged with fraud.

The charges related to the structuring and marketing of a debt product tied to subprime mortgages.

The move marks a dramatic expansion of regulatory efforts to hold people and companies responsible for activity that contributed to the financial crises.

The charges hit the shares of European banks included BNP Paribas, Banco Santander, Barclays, Deutsche Bank and HSBC which ended the day down between 2.3 and 7.3 percent.