Bank of America Sees a Boost in Fourth Quarter Earnings

Bank of America (NYSE:BAC) reported a profit in its fourth quarter results declared Thursday. The bank’s profitability was boosted by a sale of its stake in the China Construction Bank Corp., which netted a pre-tax gain of $5.3 billion, lower loan-loss provisions, which were down to $2.9 billion from $5.1 billion a year ago and a good growth in its loan book, which improved 29 percent from a year ago to $107.5 billion. However, litigation expenses and accounting charges hit earnings for $3.7 billion.

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Net income for the quarter was $1.58 billion (15 cents a share) as compared to a loss of $1.6 billion (16 cents a share) in the quarter a year ago. As in the case of its large bank peers, the company reported a decline in revenues from investment banking and sales and trading. Investment banking fees were down to $1 billion from $1.6 billion a year ago; sales and trading revenue declined to $1.9 billion from $2.4 billion in the previous year.

“We enter 2012 stronger and more efficient after two years of simplifying and streamlining our company,” Chief Executive Officer Brian Moynihan said in a statement. “We built our capital ratios to record levels during 2011 on the strength of our core businesses and by shedding those that are not core to serving customers and clients.”

Moynihan has been pushing sales of non-core investments and businesses with a view to cushion the impact of mortgage losses inherited from the Countrywide Financial acquisition and to shore up capital adequacy to new international standards. In 2012, the bank intends to replace year-end cash bonuses to certain employees by the issue of common stock amounting $1 billion – in one stroke padding up capital levels and conserving cash.

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