Bank of America swings To profit amid heavy one-time items

January 19, 2012 by · Leave a Comment
Filed under: Industry News 

This may be a turn-around story in the making.  The faster they write-off the bad loans and give more disclosure on any contractual and legal liabilities, the better.   It looks like they are getting serious about reforming the BofA bank and brand so lets hope so.

WSJ – Bank of America Corp. (BAC) closed out the turbulent 2011 year with better-than-expected revenue in the final three months, driving the bank to a fourth-quarter profit compared with the prior year’s loss.

The quarter was full of one-time charges and gains from asset sales and mortgage issues, showing the nation’s second-biggest bank by assets is still battling the past just as much as it is looking to position itself for the future. The moves provided a net boost to pre-tax earnings and the bank’s much-watched capital levels rose more than expected, cheering investors who have worried low capital could result in a highly dilutive share sale.

Shares jumped 5.7% to $7.17 and have now gained 29% this year. The stock was more than halved in 2011 by concerns about capital.  “We enter 2012 stronger and more efficient,” Chief Executive Brian Moynihan said in a statement.

But while capital increased, Bank of America still won’t be returning more to shareholders, as Moynihan said the bank wouldn’t be asking the Federal Reserve for permission to raise its dividend.

The items helped Bank of America post a profit of $1.99 billion, or 15 cents on a per-share basis, compared with the prior-year loss of $1.24 billion, or 16 cents.

Total revenue improved 11% to $24.89 billion, topping the $24.08 billion analysts polled by Thomson Reuters expected.


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