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Summary: The Bank of America is recovering strongly after the $13 billion settlement last year with state and federal regulators.
After making their payments to shareholders, Bank of America earned $4.99 billion, up from $2.04 billion just a year ago. Their share is at 45 cents, whereas a year ago it was 19 cents per share. The consumer banking giant can thank their doubled profit to lower legal costs from the financial crisis.
Their largest business, the consumer banking department, was the highest revenue and profit earner at $1.7 billion. This is a modest increase from last year at $1.63 billion in part because the lower expenses, increased number of deposits, and improved balance sheet helped balance the revenue.
Their biggest savings this year was the substantial drop in legal costs from $4 billion to $175 million. Last year the bank settled for $13 billion with state and federal regulators for its participation in the 2008 financial crisis.
The Bank of America has been expanding its business in residential mortgages, home equity loans, and new credit card accounts. The mortgages were up to $16 billion from $11.1 billion last year. New credit card accounts are at the highest since 2008.
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They have been cleaning up delinquent accounts left over from the housing crisis. The number of 60 day or more delinquent mortgages dropped by half.
The department of the bank that works with troubled assets even made a small profit this year. This is the first time this department has made a profit since 2010 when it was created.
Source: http://abcnews.go.com/Business/wireStory/bank-america-profits-jump-legal-costs-drop-32461317
Photo: topics.nytimes.com
