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Bank of America reports 43% drop in quarterly profits | Bank of America reports 43% drop in quarterly profits |
(about 20 hours later) | |
Bank of America has reported a 43% drop in its second-quarter profits after a fall in mortgage revenue and a rise in legal costs. | Bank of America has reported a 43% drop in its second-quarter profits after a fall in mortgage revenue and a rise in legal costs. |
The bank, the US's second largest, said net income of $2.3bn (£1.34bn) was down from $3.4bn (£1.99bn) a year earlier. | The bank, the US's second largest, said net income of $2.3bn (£1.34bn) was down from $3.4bn (£1.99bn) a year earlier. |
Its finances have been hit recently by huge payments to the authorities to fend off accusations of wrong-doing. | Its finances have been hit recently by huge payments to the authorities to fend off accusations of wrong-doing. |
In the past year, its earnings per share have fallen from 32 cents (19p) to 19 cents (11p). | |
In April the bank agreed to pay $9.5bn for misleading US mortgage lenders Fannie Mae and Freddie Mac before the financial crisis in 2008. | In April the bank agreed to pay $9.5bn for misleading US mortgage lenders Fannie Mae and Freddie Mac before the financial crisis in 2008. |
It then agreed separately to pay $783m (£470m) in fines and refunds, for mis-selling payment and identity theft insurance to nearly three million credit card customers. | It then agreed separately to pay $783m (£470m) in fines and refunds, for mis-selling payment and identity theft insurance to nearly three million credit card customers. |
The bank's chief financial officer Bruce Thompson acknowledged the rise in litigation costs and praised the bank for doing "a good job managing expenses". | The bank's chief financial officer Bruce Thompson acknowledged the rise in litigation costs and praised the bank for doing "a good job managing expenses". |
He also said that during the quarter the bank's credit losses remained "near historical lows." | He also said that during the quarter the bank's credit losses remained "near historical lows." |
The bank's results come as analysts have noted a split in the US lenders' quarterly results between banks that cater mainly to U.S customers and those with a more prominent global presence. | The bank's results come as analysts have noted a split in the US lenders' quarterly results between banks that cater mainly to U.S customers and those with a more prominent global presence. |
Domestic-orientated banks have been helped by a pick-up in the U.S economy. | Domestic-orientated banks have been helped by a pick-up in the U.S economy. |
International traders have not fared so well, with Citigroup seeing an almost 10% fall in its share price and GoldmanSachs's shares dropping 7%. | International traders have not fared so well, with Citigroup seeing an almost 10% fall in its share price and GoldmanSachs's shares dropping 7%. |
Wells Fargo, which is responsible for one out of six US home loans, saw its share price rise 3% on Friday. | Wells Fargo, which is responsible for one out of six US home loans, saw its share price rise 3% on Friday. |
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