NEW YORK: Bank of America reported yesterday a quarterly loss of $276m due to $6bn in legal expenses that included a huge settlement with the US on mortgage-backed securities.
The bank had revenues of $22.8bn, compared with earnings of $1.5bn on revenues of $23.4bn in the period a year ago. Operating results were mixed and included weaker mortgage banking profits but higher investment and brokerage income. “The cost of resolving more of our mortgage issues hurt our earnings this quarter,” said CEO Brian Moynihan. “But the earnings power of our business and customer strategy generated solid results and we continued to return excess capital to our shareholders.”
The bank said $3.6bn of the legal costs were associated with a $9.5bn settlement with the Federal Housing Finance Agency to resolve charges that it sold bad mortgage-backed securities to mortgage giants Freddie Mac and Fannie Mae ahead of the housing bust. The additional legal costs also went mostly to address other mortgage-related problems. AFP
