Profits fall at Bank of America

Earnings at America’s largest bank have disappointed investors

Bank of America Merrill Lynch has reported a 38% decline in profits for the first three months of the 2010 compared with the same period in 2010.

The US’s largest bank reported lower-than-expected profits of $2bn (£1.23bn) compared with $3.2bn in the same period last year.

The bank had made a net loss of $1.2bn in the final quarter of 2010.

The bank continued to struggle with residential mortgages, losing $2.39bn as debts were not repaid.

High unemployment and falling property prices in the US has seen many US households falling behind on their mortgages.

Analysts were disappointed by the figures which came after unexpectedly good results from rival JP Morgan.

“I think the reason seems to be Bank of America is struggling with the mortgage mess and cleaning up what is going on there,” said David Morrison a market strategist at GFT Global Markets.

The bank announced that Bruce Thompson, its chief risk officer, will also become chief financial officer in July.

Chuck Noski, the current CFO, will become vice chairman of Bank of America.

Mortgage losses were one of the main causes of the financial crisis in 2008 which saw Bank of America merge with investment bank Merryl Lynch.

Heavy losses in the merged unit forced the bank to rely heavily on Federal funds through the Troubled Asset Relief Program.

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