Profits down, but higher than expected. The fourth quarter di Bank of America closes with results in chiaroscuro. The institute certainly cannot boast the numbers of its American cousins Goldman Sachs e JP Morgan, which yesterday published enviable numbers, but consoles itself by beating the pessimism of analysts.
The Bank has scored net profits of $732 million (3 cents a share), down 63% from the $1,99 billion it posted in the same period last year (15 cents a share). Economists had forecast profits of two cents a share. Revenue totaled $18,89 billion, versus $25,14 billion in the fourth quarter of 2011.
Better annual performance. In 2012, net profits were $4,188 billion (25 cents per share), against 1,44 billion in the previous year (one cent per share). Revenue dropped from $94,42 billion to $84,23 billion.
According to the managing director, Brian Moynian, the Bank "started 2013 with a solid position and well oriented for further growth". The extraordinary charges connected with a legal dispute and the settlement in the foreclosure case weighed on the results in particular.
Bank of America has agreed to pay $11,6 billion to Fannie Mae. It all started in 2008, when the institute decided to buy Countrywide Financial, a true protagonist of the scam of the century, that of subprime mortgages. Unfortunately for the institute, the investigations have shown the repeated frauds of Countrywide, which systematically cheated the customers to whom it sold securities linked to real estate loans, passing them off as very safe investments. A scam in which many giants have fallen, including Fannie Mae. To date, Countrywide's criminal finance has cost Bank of America an estimated $40 billion.
The latest deal weighs $2,7 billion on fourth-quarter accounts (pre-tax), while another $2,5 billion will flow out of BoA following the plea deal to settle another subprime lawsuit. Ten US banks have agreed to pay a total of 8,5 billion to compensate for the easy foreclosures of recent years: operations carried out thanks to "automatic signatures" of judicial documents, without anyone bothering to analyze case by case, as had also been promised .
Bank of America finally saw reduce provisions against future credit-related losses of $2,2 billion, up from $2,93 billion a year prior but up $1,77 billion in the third quarter. The mortgages, commercial loans (475 billion loans disbursed in 2012, of which 310,5 billion commercial loans not related to real estate) and Global Market divisions performed well. Small business lending increased 28% to $8,7 billion in 2012. Wealth Management and Investment Management division clients increased 7%.
