Connect to share and comment
The second-largest US lender has reported a $2 billion profit for the three months to the end of 2011, while Morgan Stanley reported fourth-quarter losses of $250 million.
Bank of America, the second-largest US lender, has returned to profit, reporting a $2 billion profit for the final three months of 2011, in a year that saw its share price hammered due to a drop in investment banking and trading and sales revenue.
The North Carolina-based bank suffered losses of $1.2 billion during the same period in 2010, the BBC reports.
According to Bloomberg, the bank swung to a fourth quarter profit by selling assets and building capital at a faster rate than expected.
For the full year, Bank of America secured net profits of $1.4 billion, compared to a net loss of $2.2 billion in 2010, signalling sustained recovery for the company.
The bank’s shares dropped by 58 percent last year, partly due to investor concerns over capital. However, it managed to benefit from pre-tax gains amounting to $5.3 billion from the sale of China Construction Bank shares, as well as from the exchange of trust preferred securities and the selling of debt securities, according to the Daily Telegraph.
More from GlobalPost: Bank of America sells stake in China Construction Bank
Bank of America’s CEO Brian T. Moynihan is reducing holdings, slashing expenses and cutting staff while raising capital to comply with regulators’ demands for a larger cushion against losses, Bloomberg reports.
$50 billion in assets are gone so far, while 30,000 jobs are to be jettisoned under Moynihan’s Project New BAC, in a push to save $5 billion per year.
Elsewhere, Morgan Stanley, the world’s biggest broker, reported fourth-quarter losses of $250 million, compared to a profit of $836 million over the last three months of 2010, highlighting the impact of the European debt crisis.
The bank reported net revenues of $32.4 billion in 2011, compared to $31.4 billion the previous year, according to the BBC.
More from GlobalPost: Bank of America pays $335 million to settle fair-lending case