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Legal fees slam BofA profit

Wednesday, October 15, 2014 - 01:18

Bank of America eked out a profit after settling government charges over mortgage securities sales. One analyst notes, its core businesses are doing well. Fred Katayama reports.

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TV AND WEB RESTRICTIONS~*NONE***~ A whopping legal settlement body-slammed BofA. Quarterly profit at the U.S.' second largest bank shrank 93 percent. Bank of America had written off $5.3 billion in August after paying nearly $17 billion to settle government charges that it had sold troubled mortgage securities. BofA posted a net loss attributable to shareholders, but the results were much better than Wall Street had feared. The bank with the huge consumer franchise did well in that sector. Lower provision for credit losses there pushed up profit, and the bank issued 15 percent more credit cards in the quarter. ISI analyst Glenn Schorr noted that 4 of its 5 businesses grew earnings, saying, "The core businesses are starting to shine... There should be more to come as earnings hopefully grow from this level as the businesses are strong and legal costs wane." Like its competitors, BofA - the fourth bank to report so far - boosted trading revenue in fixed income, currencies and commodities. Also, like its peers, its home loan originations fell sharply from a year ago, and its loss in the consumer real estate business grew five-fold. BofA shares fell at the open. It's outperforming its peers, gaining 6 percent this year.

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Legal fees slam BofA profit

Wednesday, October 15, 2014 - 01:18