Bank of America reports 43% drop in quarterly profits

A Bank of America sign in New York Image copyright Getty Images
Image caption Bank of America funded 13.7 billion in residential home loans and home equity loans during the second quarter of 2014.

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.

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.

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".

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.

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%.

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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