21 Apr 2009

Bank of America reports credit losses

7:03 am on 21 April 2009

Bank of America has reported strong profits, but also a big increase in problem loans.

Shares in the bank fell by 15% percent on Monday, even though its purchase of Merrill Lynch helped its profit rise to $US4 2 billion in the first three months of the year, from $US1.2 billion a year earlier.

The figures were inflated by its purchases of Merrill Lynch, which added $US3.7 billion in income, and Countrywide, which boosted its mortgage arm.

However, the bank has set aside $US13.38 billion for credit losses, up from $US8.54 billion in the fourth quarter.

Non-performing assets, ie loan repayments that are not being made, jumped 41% to $US26 billion.

Bank of America has received $US45 billion from the US government.