Bank of America Corp.'s second-quarter earnings plunged 43% as the nation's second-largest bank recorded 4 billion additional reasons to regret its 2008 purchase of high-risk home lender Countrywide Financial Corp. in Calabasas.
Bank of America said Wednesday that it earmarked $4 billion more for legal costs, up from $471 million a year ago. It already had recorded more than $50 billion in mortgage-related costs, including a payout of more than $6 billion to home finance giants Fannie Mae and Freddie Mac.
The Charlotte, N.C., bank is negotiating with the Justice Department to settle remaining claims by federal and state government agencies. BofA proposed a $13-billion settlement Tuesday but the government was demanding more, according to a Wall Street Journal report Wednesday.
Much of the liability stems from aggressive Countrywide lending, part of a wave of easy money that enabled millions of Americans to buy homes they couldn't afford. Investors also recorded large losses on mortgage-linked investments peddled before the financial crisis by Bank of America and by Merrill Lynch & Co., which the bank also acquired in 2008.
BofA said its second-quarter net income totaled $2.3 billion, or 19 cents a share, compared to $4 billion, or 32 cents a share, for the same quarter last year. Revenue fell 4% to $21.8 billion.
The results came up well short of Wall Street's expectations, and Bank of America shares fell 35 cents, or 2.2%, to $15.46 in morning trading. Shares of rivals Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc. had risen earlier this week when their results beat analyst estimates.
Bank of America also said it had agreed to pay $650 million to settle its mortgage securities litigation with American International Group Inc., the worldwide insurer whose collapse helped trigger the financial crisis.
The bank's chief executive, Brian Moynihan, said that despite the tangled litigation, the prospects for Bank of America were improving.
"The economy continues to strengthen, and our customers and clients are doing more business with us," Moynihan said in the earnings announcement.
"Among other positive indicators, consumers are spending more, brokerage assets are up by double digits and our corporate clients are increasingly turning to us to help finance business expansion and merger activity," Moynihan said. "We are well positioned for further progress."
Follow @ScottReckard for news of banks and home loans.
Copyright © 2014, Los Angeles TimesAnda sedang membaca artikel tentang
Bank of America earnings tumble 43% on mortgage litigation costs
Dengan url
http://sehatumbuah.blogspot.com/2014/07/bank-of-america-earnings-tumble-43-on.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Bank of America earnings tumble 43% on mortgage litigation costs
namun jangan lupa untuk meletakkan link
Bank of America earnings tumble 43% on mortgage litigation costs
sebagai sumbernya
0 komentar:
Posting Komentar