BOA earnings take hit from settlements
January 18, 2013, 12:23 am TWN
NEW YORK--Bank of America reported fourth-quarter earnings that were lower than the year-ago period but slightly above expectations as it worked to put the effects of the housing bust behind it.
Bank of America said it had net earnings of US$367 million compared with US$1.6 billion in the same 2011 fourth quarter.
That equated to 3 cents per share, better than the 2 cents per share projected by analysts.
Bank of America's revenue of US$18.67 billion in the quarter missed estimates of US$21.03 billion.
As expected, the giant U.S. bank's earnings were hit by a recently announced settlement with government-controlled mortgage giant Fannie Mae, which resulted in a charge of US$2.7 billion.
Earnings were also dented by a US$2.5 billion charge related to a settlement between several large banks and the Office of the Comptroller of the Currency and Federal Reserve over foreclosure processes.
Bank of America chief financial officer Bruce Thompson said the bank had made progress in 2012 in putting the housing bust behind it.
“We've put a lot of risk behind us in 2012, and we just feel we're in a much better place as we head into 2013,” Thompson said.
Bank of America said that compared with a year ago, its results for the 2012 fourth quarter were driven by improved credit quality across most major portfolios and higher investment banking fees, partially offset by an increase in consumer real estate losses reflecting the Fannie Mae and U.S. settlements
Bank of America said it had 267,190 full-time employees as of the end of the quarter, some 5,400 lower than the prior quarter.