Profits three times higher than expected at Bank of America
BANK of America, which employs over 1,700 people in Ireland, yesterday reported first quarter profits of $3.2bn (€2.37bn), tripling analysts' expectations. The company has offices in Dublin and in Carrick-on-Shannon, Co Leitrim.
The results were hailed by the company after a tumultuous year that had seen its former chairman and chief executive, Ken Lewis, resign on the back of the takeover of Merrill Lynch, the Wall Street investment bank, in 2008.
Net income amounted to 28 cents a share, compared with $4.25bn, or 44 cents, in the same period a year earlier.
Merrill Lynch drove the revenue within the firm as Bank of America returned to profit for the first time in three quarters.
Sales and trading revenue hit a record $7bn in the first quarter, according to a statement yesterday from the Charlotte, North Carolina-based bank.
Merrill Lynch's results more than erased losses tied to home lending which hobbled the retail arm of the bank.
Chief executive officer Brian Moynihan told analysts on a conference call that the lender had "broken the back" on defaults in the credit-card unit, which turned its first profit in more than a year.
"The worst of the credit cycle is clearly behind us," he said.
Mr Moynihan also added that write-offs tied to home-equity loans still lay ahead, and the bank plans to keep liquidity high until the economy shows more signs of strength.
Bank of America's share price dropped 95 cents to $18.53 yesterday afternoon, but that was blamed on legal action against its rival, Goldman Sachs, rather than the quarterly results.
Merrill Lynch was one of Wall Street's largest independent investment banks until the financial crisis of September 2008.