Bank of America profits jump 70%

Bank of America reported a 70.2 percent increase in second quarter profits on Wednesday, fueled by strong trading and wealth management returns and better credit quality. Earnings at the US giant came in at $3.6 billion on revenues of $22.7 billion, up from $2.1 billion on $22 billion in revenues a year earlier. The results translated into profits of 32 cents per share, well above the 25 cents per share expected by analysts. Earnings were particularly strong in global wealth and investment management, rising 38 percent to $758 million. Bank of America cited higher asset management fees and client deposit inflows. The other main area of strength was global markets, where equities sales and trading revenue rose to enable the division to nearly double profits at $959 million. At the same time, the bank warned that currency, fixed income and commodity trading was dragged down towards the end of the quarter by interest rate volatility following the June policy announcement by the US Federal Reserve. Credit quality continued to improve, with the bank saying the number of delinquent loans declined across all major consumer portfolios. The provision for credit losses was $1.2 billion, a decline of $562 million. The weakest area was consumer real estate services, where losses deepened from $744 million to $937 million. The size of the loan servicing portfolio declined and a rise in mortgage originations was offset by lower margins. Chief Executive Bruce Thompson gave a sunny outlook on the economic recovery. "We are doing more business with our customers and clients, and gaining momentum across every custom group we serve," Thompson said. "We must keep improving, but with the consumer recovering and businesses strong, we have lots of opportunity ahead." Bank of America shares were up 0.7 percent in premarket trading around 1150 GMT.