BofA's Moynihan Says Core Business Is Resilient
Bank of America CEO Brian Moynihan defended the banking giant's quarterly performance in a CNBC interview Friday, acknowledging continuing problems with its mortgage business but saying the bank's core operations are in good shape.
"If you look at the core underlying business in the fourth quarter what we saw was the resiliency of our franchise come through: the commercial banking businesses, the card businesses, businesses which a year ago were making money are making strong profits," Moynihan said.
"Yet we still have the mortgage business we have to still work through," he added.
Bank of Americareported fourth-quarter earningsearly Friday, including a $2 billion writedown in value of its mortgage business, and a $4.1 billion provision for future mortgage repurchase claims.
But the bank's global banking and markets unit, including Merrill Lynch's former investment bank operations, posted a profit of $6.3 billion, the largest profit of any business unit.
Excluding the writedown, the bank earned $756 million or 4 cents a share, far less than the 14 cents a share expected by analysts surveyed by Thomas Reuters, although analysts differed about how to treat the mortgage writedowns.
Moynihan did say 2011 won't be "robust," but will be solid, as the U.S. economy improves.
"We see the American consumer healing and moving forward and, as you look at the all important question which is unemployment, we're seeing slow, steady progress," Moynihan said.
Moynihan also said he expected Bank of America would increase its dividend in the second half of this year.
As for the mortgage business, the BofA CEO is beginning to see improvement.
"This is a huge human issue in terms of how many people are delinquent and we're working through it," Moynihan said. "But, the good news is it's relatively stable and it's becoming very localized," he added.