Bank of America, the largest US bank by assets, reported first-quarter profit that beat the most optimistic analysts’ estimates on gains from home refinancing and trading.
Net income more than tripled to $4.24 billion from $1.21 billion, or 23 cents a share, a year earlier, the Charlotte, North Carolina-based bank said today in a statement.
Earnings per share equalled 44 cents in the three months ended March 31st after the company paid more than $700 million in preferred dividends to the US rescue fund.
The results may help chairman and chief executive Kenneth D. Lewis stave off pressure from shareholders after Bank of America spent more than $30 billion on takeovers during the past year as the recession worsened.
Mr Lewis said February 26th that the purchases of Merrill Lynch and Countrywide Financial were “the two stars” that were driving profit at the bank.
“Three weeks ago, everyone had a noose around Ken Lewis’s neck, but it’s amazing what a 50 per cent increase in a stock price can do,” said Robert Patten, a New York-based analyst at Morgan Keegan.
Bank of America shares closed at $10.60 on April 17th in New York Stock Exchange trading after falling to as low as $2.53 in February. “There’s a return to normalcy in some of their trading operations, and the writedowns aren’t as severe,” Mr Patten said.
Bank of America follows New York-based JPMorgan Chase, Goldman Sachs and Citigroup in posting first-quarter earnings that topped analysts’ estimates.
The quarter included an addition of $6.4 billion to loan loss reserves.
Bank of America benefited from trading at the Merrill Lynch brokerage division and an increase in mortgage refinancings after its July acquisition of Countrywide, the biggest US home lender.
Bloomberg