Bank of America joined other big banks in reporting a big second-quarter profit even as losses from failed loans continued to rise.
Bank of America said yesterday its earnings after payment of preferred dividends fell to US$2.42 billion, or US$0.33 per share, compared with a profit of US$3.22 billion, or US$0.72 per share, in the same period last year.
The earnings beat forecasts. Analysts expected profit of US$0.28 per share. Their revenue forecast, however, was slightly ahead of Bank of America’s actual revenue of US$33.1 billion.
Despite the higher earnings, Bank of America’s shares fell nearly 3 percent in premarket trading yesterday. The overall stock market appeared headed for a pullback.
Bank of America said its results also reflected a gain from selling part of its stake in China Construction Bank Corp (中國建設銀行). They also included US$713 million of dividend payments tied to a federal bailout, and a charge to bolster a federal deposit insurance fund.
Bank of America, like Goldman Sachs Group Inc and JPMorgan Chase & Co, said it had a handsome profit from its trading business. The company acquired Merrill Lynch & Co this year.
But, like JPMorgan, it did report continuing losses from failed loans. Bank of America said it recorded a US$13.4 billion provision for loan losses during the second quarter as consumers struggled with debt amid rising unemployment.
The company also said its mortgage revenue rose following its acquisition of lender Countrywide Financial Corp, reflecting the refinancing boom triggered by lower mortgage rates.