Tomahawk, WI 10/18/2013 (BasicsMedia) – Bank of America Corp (NYSE:BAC) has [posted financial results that are beyond what even the most optimistic analyst had predicted. After such a long time, the bank has posted profits, which are beyond what Wall Street had estimated. The company accompanied its latest quarterly report with the reasons it says are behind the recent good performance. The bank says that it attributes the latest profits to the remarkable growth it has witnessed in its departments that are tasked with wealth and consumer management. There are more reasons why it outperformed all projections.

Some Financial Experts Never Lost Faith in BAC

Many financial experts believed in the ability of BAC to turn itself into a profitable company once again. These experts point at the businesses the company picked up during the time it was facing financial crisis. These businesses have now started bearing fruit and this fact is well demonstrated by the latest quarterly financials. BAC’s largest division is the retail banking unit. The unit has experienced remarkable growth of up to 32%. The unit’s growth has led to increased revenue while cutting down on credit costs. I think BAC has found the right formula.

BAC Benefits a Lot from Its Retail Banking Unit

The bank’s retail banking unit is composed of a few portions of the mortgage company it acquired in July 2008, Countrywide Financial Corp. Merrill Lynch is the other part of the retail banking unit that has been responsible for the stellar performance posted by BAC in its latest quarterly results, and was acquired back in January 2009. The profits that BAC posted in this latest financial results amount to $719 million. The bank attributes this to the 1 million credit cards that it issued out during the third quarter of 2013, which is the highest in 5 years.

A close look at the bank’s financial reports indicates that it lost in its mortgage division. BAC is not the only large U.S bank that lost in its mortgage division. Every single bank in the U.S, especially the largest ones such as JPM, Citigroup, and Wells Fargo, encountered losses in their mortgage divisions. BAC’s losses in this division amounted to $1 billion in the third quarter. The high interest rates that were experienced in the mortgages al over the U.S played a major role in the huge losses BAC encountered during the Q3 of 2013. The situation remains unchanged.

BAC could have done much better if not for the $40 billion it spent on Countrywide’s litigation costs. This quarter’s loss of $1 billion is much higher than what BAC reported for the third quarter of 2012, where it lost $857 million. The bank set aside around $300 million during the latest quarter to handle litigation matters. The bank’s Merrill Lynch division lost $778 million, which was also much higher than the $276 million it posted last year during the third quarter as well. However, the $2.22 billion it earned as net income for shareholders is quite impressive.

It may be too early to say with certainty whether BAC is back to profitability. However, the latest results are not discouraging. If the bank can reduce its losses, and benefit from good performance from the mortgages department, it will be on its way towards prolonged profitability.

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