Economy

Bank of America hits $2.7 billion for second quarter profits

Bank of America this morning posted second-quarter earnings of $2.7 billion, counting preferred dividend payments, up from $2.4 billion a year earlier.

The Charlotte-based bank said the results were driven by lower loan losses — which improved for a fourth consecutive quarter — and the sale of non-core assets. The nation's biggest bank was hurt by lower trading profits, sluggish mortgage banking income and a payroll tax being levied in the United Kingdom.

On an earnings per share basis, the bank made 27 cents in the quarter, better than the 22 cents per share projected by analysts polled by Thomson One Analytics.

"Our quarterly results show that we are making progress on our strategy to align around our three core customer groups — consumers, businesses, and institutional investors — and create the financial institution that customers tell us they want, built on a broad relationship of clarity, transparency, and helping them manage through challenging times," chief executive Brian Moynihan said in a statement. "We improved our capital foundation through retained earnings, and credit quality improved even faster than expected. We have the most complete financial franchise in the world, and we are focused on executing our strategy and delivering outstanding long-term value to our customers and shareholders."

Like the rest of the industry, the Charlotte-based bank is facing massive uncertainty over how it will deal with sweeping new financial rules from Congress, which passed the Senate on Thursday. Those rules, along with other new regulations such as the pending Basel 3 accords, will likely crimp Bank of America's profits in derivatives trading and make some consumer products, long the bank's bread and butter, less profitable.

To read the complete article, visit www.charlotteobserver.com.

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