Bank of America profit beats expectations as legal expenses fall
By Anil D'Silva and Amrutha Gayathri
(Reuters) - Bank of America Corp, the No. 2 U.S. bank by assets, reported a better-than-expected first-quarter profit, reversing from a year-earlier loss, as legal costs fell steeply and the bank earned more from mortgage lending.
Still, BofA's cost-cutting efforts fell short of what some in the market had expected, and the bank's shares fell about 1.2 percent to $15.63 in morning trading on Wednesday.
Litigation expenses fell to $370 million in the latest quarter from $6 billion a year earlier, suggesting again that the worst of the bank's legal troubles may be over.
BofA has paid at least $70 billion so far to settle legal issues related to the financial crisis, undermining cost-cutting initiatives introduced by Chief Executive Brian Moynihan since he took the bank's top job in 2010.
Through job cuts, the bank is approaching employment levels of early 2008, before it brought in more than 100,000 employees as a result of its purchase of Countrywide Financial Corp and Merrill Lynch, Moynihan said on a call.
BofA's headcount at the end of the quarter was under 220,000, down 8 percent from a year earlier, he said.
However, persistent low interest rates have overshadowed cost cuts and hurt the bank's net interest income, which fell 6.3 percent in the quarter.
"At a time of continued low interest rates, we had good expense control...," Moynihan said in a statement on Wednesday. Continued...