Bank of America profits jump 6-fold

Bank of America on Wednesday reported a six-fold increase in first-quarter earnings even as it signaled that profits were constrained by the low interest rate environment. The US banking giant said net income was $2.3 billion on revenues of $23.7 billion, compared with $328 million on revenues of $22.5 billion in the year-earlier quarter. The better results were driven in part by $1 billion less in expenses due to company efforts to "streamline processes" and fewer costs related to service delinquent loans. The company had about 16,000 fewer employees in March 2013, compared with the year-ago period. Like other banks, Bank of America also gained on stronger credit quality as the housing market steadies. The company's provision for credit losses fell to $1.7 billion, down from $2.4 billion in the year-ago period. Non-interest income increased $1.4 billion from the year-ago period, thanks to negative accounting adjustments on some liabilities of just $90 million compared with $3.3 billion in the year-ago period. But as with other banks, the bank felt some of the weight of lower interest rates, with revenue and net income lower for the consumer and business banking category. Net interest income, a key earnings benchmark, fell $250 million from the year-ago quarter driven in part by the "continued low-rate environment." The bank also reported lower revenues and profits in its consumer real estate services division due to lower mortgage banking income. Bank of America shares were off 2.6 percent in pre-market trading. Executives said the bank was on track with previously-announced plans on dividends and share repurchases. "There were many examples of progress this quarter," said Chief Financial Officer Bruce Thompson. "We reduced non-interest expense by nearly $1 billion year-over-year, and credit costs continued to decline," he said. "Our relentless focus on capital, liquidity, and expense reduction enables us to be in position to return excess capital to investors through the previously announced common stock repurchase program and preferred stock redemptions."