Profits Up at Bank of America, Wachovia
Bank of America’s fourth quarter profits rose 47% while Wachovia’s earnings rose 35%, as recently-acquired businesses and a growth in fees helped boost results at both Charlotte-based banks.
At Bank of America, the nation’s second-largest bank, the addition of credit-card issuer MBNA and gains in investment banking buoyed profits. However, results disappointed some investors, as expenses rose from the third quarter while revenue fell, and equity investment gains that might not be repeated more than doubled.
Fourth quarter net income climbed to $5.26 billion, or $1.16 per share, from $3.57 billion, or 88 cents per share, a year ago. Results for the fourth quarter of 2005 do not include MBNA, which was acquired on Jan. 1, 2006.
Excluding merger and restructuring charges, the company earned $5.01 billion, or $1.19 per share, in the latest quarter. That was a penny better than forecasts, according to a consensus estimate compiled Thomson Financial.
Revenue grew 34% to $18.46 billion from $13.81 billion last year, exceeding the $18.01 billion analysts were expecting.
At Wachovia, the nation’s fourth-largest bank, the acquisition of Golden West Financial and growth in fees boosted results.
Net income rose to $2.3 billion, or $1.20 per share, from $1.71 billion, or $1.09, a year earlier.
Excluding merger costs, profit totaled $2.33 billion, or $1.21 per share, topping the average analyst forecast by 3 cents, according to Reuters Estimates.
Revenue rose 31% to $8.59 billion, topping the average $7.91 billion forecast. Non-interest expense rose 18% to $4.93 billion. Loan losses more than doubled.