BofA profit soars as expenses fall to lowest since 2008

Bank of America, the number two US bank by assets, has reported its biggest quarterly profit in nearly four years as mortgage banking revenue soared and expenses fell to their lowest since the financial crisis.

B of A’s legal expenses, which have totalled at least $70 billion since 2008, fell for the second straight quarter, suggesting the worst of the bank’s legal problems stemming from the financial crisis was behind it.

Litigation expenses, which had undermined the cost-cutting initiatives introduced by chief executive Brian Moynihan since he assumed the top job in 2010, fell to $175 million from $4 billion a year earlier. “We also benefited from the improvement in the US economy, where we are particularly well positioned,” Mr Moynihan said.

Net income attributable to Bank of America’s shareholders more than doubled to $4.99 billion, or 45 cents a share, in the second quarter ended June 30th, from $2.04 billion, or 19 cents a share, a year earlier. B of A’s shares were up about 3 per cent in morning trade in New York yesterday.

The bank’s non-interest expenses fell 25.5 per cent to $13.82 billion in the quarter, while net interest income rose 4.7 per cent to $10.49 billion. Overall revenue, excluding adjustments, rose 1.7 per cent to $22.12 billion.

The fourth-biggest US mortgage lender said its mortgage banking revenue almost doubled to $1 billion. More than half of the quarter’s new mortgage loans were for home purchases, rather than the refinancings that previously drove revenue in the business. – (Reuters)