Bank of America today posted an unexpectedly sharp decline in first-quarter profit, plagued by losses in the mortgage business, and the bank named a new chief financial officer.
The largest US bank lost more than $2.39 billion in its home loan business as revenue fell and expenses rose. A settlement with a bond insurer over mortgage bonds gone bad cost it $1.6 billion.
The results give some inkling of why the Federal Reserve told the bank in March to rein in its plans to boost dividends, as competitors were authorised to hike their payouts.
The bank did manage to earn $2 billion in the quarter, its first profit since the second quarter of 2010. Bank of America faced big mortgage and card-related losses throughout the second half of last year.from $3.2 billion, or 28 cents per share, in the same quarter a year ago.
The loss in its residential mortgage unit of more than $2.39 billion compared with a loss of $2.07 billion a year earlier.
The bank said Bruce Thompson, chief risk officer, will also take on the role of chief financial officer at the end of the second quarter. Chuck Noski, current CFO, will become vice chairman of the bank.
