Bank of America earnings rise on better credit quality

Bank of America Wednesday reported an eight-fold increase in quarterly earnings due to primarily improving credit quality and costly charges in the year-ago period.
The US banking giant reported fourth-quarter earnings of USD 3.2 billion on revenues of USD 21.5 billion, compared with earnings of USD 367 million on revenues of USD 18.7 billion in the year-ago period.
Those results translated into per-share income of 29 cents, above the 26 cents projected by analysts.
The results were boosted by much lower provisions for credit losses than in the 2012 period. Bank of America booked just USD 336 million in reserves compared with USD 2.2 billion in the 2012 quarter.

Leading banks have benefited from better credit quality in recent quarters as the US economy has improved and consumers have paid down debt.
Bank of America also pointed to higher commercial loan balances and record global banking revenue.

But litigation expenses rose to USD 2.3 billion from USD 916 million a year ago as it confronts suits related to residential mortgage-backed securities sold by the bank ahead of the housing crisis.
Bank of America reported a quarterly loss of USD 1.1 billion in its consumer real estate division compared with a loss of USD 3.7 billion in the 2012 period. The 2012 quarter was hit by a large settlements with the Federal National Mortgage Association, or Fannie Mae.

Earnings in consumer and business banking rose to USD 2.0 billion thanks to better credit quality and higher average deposit balances. Earnings in this category were USD 1.4 billion a year ago.
Bank of America reported full-year earnings of USD 10.1 billion compared with USD 2.8 billion in 2012.