Bank of America
(BofA) has
reported net income of $2.05bn for the three
months to 31 March, a fall of 35.5% from the $3.18bn earned by the
US’ largest retail bank in the year-ago period.

Results for the first quarter of fiscal
2011 were boosted by lower credit costs, gains from equity
investments and higher investment banking revenue; BofA also
reported strong growth in deposits.

First-quarter highlights

  • BofA’s retail focused Deposits business
    unit returned to the black, earning net income of $355m having lost
    $190m in the prior quarter (Q110: net profit of $701m);
  • US credit card performance metrics
    continued to improve with 30+ day delinquency rates near all-time
    lows, net losses declining for the sixth straight quarter and
    customer payment rates improving for the seventh straight
  • BofA’s Global Card Services business unit
    posted net income of $1.7bn, an increase of more than 75% from the
    year-ago-quarter as lower credit costs more than offset a $1.2bn
    decline in revenue. The lower revenue reflected a drop in net
    interest income from lower yields and lower average loans,
    including run-off portfolios, as well as lower non-interest income
    due to the impact of the CARD Act as provisions became effective
    throughout 2010;
  • Average deposit balances were above
    $1trn, gaining 4% from the year-ago period and 2% from the fourth
    quarter of 2010;
  • Regulatory capital ratios remained strong
    with the Tier 1 common ratio at 8.64% at 31 March compared 7.60% at
    March 31, 2010, and,
  • The provision for credit losses declined
    61% from the year-ago quarter.

BofA CEO Brian Moynihan

“Strong growth in
deposit balances and positive contributions from five of our six
businesses reflect the steady improvement in the broader

“Our customer-focused
strategy is working well, and we also benefited from improved
credit quality.

“While still soft, the
economy is healing; we see retail spending up versus the year-ago
period and continued declines in bankruptcy filings and delinquency

BofA ended the first
quarter with a branch network of 5,805 outlets, having shuttered a
net 134 units or 2.2% of its branches during the year.

By contrast, rival
JPMorgan Chase increased its network by 3% over the same period,
ending the first quarter with 5,292 branches.