Bank of America swings back to profit

Bank of America building Bank of America is seeking to make billions of dollars worth of savings

Bank of America has reported a second quarter profit after it cut costs and reduced the reserves set aside to absorb losses on bad debt.

Net profit was $2.5bn (£1.6bn), the bank said. A year earlier, it had reported a net loss of $8.8bn, mainly because of a mortgage settlement.

Total revenue fell to $21.97bn, up from $13.24bn a year earlier, but down from $22.28bn in the first quarter.

However, the bank said it had succeeded in making big cost cuts.

Bank of America began a cost-cutting programme last year, and says it expects to make a total of $8bn in annualised savings by mid-2015.

'Opportunities'

The bank was badly hit during the financial crisis and has struggled with losses related to its 2008 purchase of subprime lender Countrywide Financial.

In the second quarter, revenues at Bank of America's consumer and business banking units fell to $7.3bn from $8.7bn a year ago, and there was also a fall in revenue at its global banking, global markets and global wealth and investment divisions.

The bank's chief executive, Brian Moynihan, said: "In a challenging global economy, we still see opportunities to do more with our customers and clients.

"Lending to commercial businesses increased for the sixth straight quarter - with small business lending and commitments up 23% in a year - and consumer credit is in the best shape in years."

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features & Analysis

Elsewhere on the BBC

  • SailingGame on

    BBC Capital discovers why certain sports seem to have a special appeal for those with deep pockets

Programmes

  • European Union's anti-terrorism chief Gilles de KerchoveHARDtalk Watch

    Anti-terrorism chief Gilles de Kerchove on the threat from returning Islamic State fighters

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.