Bank of America close to $13bn mortgage bill

Tim Wallace
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Bank of America Merrill Lynch is next in line for a multi-billion dollar settlement for toxic mortgage sales in the pre-crisis years, it emerged yesterday.

The bank is negotiating the settlement, which could come to around $13bn (£7.6bn) – similar in scale to the bill faced by JP Morgan.

Executives from the bank met Justice Department officials in the US on Tuesday, the Wall Street Journal reported, but made no more progress on the settlement.

It came as the giant investment bank and lender reported a fall in profits in the second quarter of the year.

Net income dived 42.9 per cent to $2.29bn in the three-month period.

Revenues fell four per cent to $22bn, while non-interest costs jumped 15.8 per cent to $18.5bn.

It bucked the trend among banks by achieving higher revenues in fixed income, currencies and commodities, which rose five per cent to $2.4bn.

Chief executive Brian Moynihan said the strong economy should help the bank expand.

“Consumers are spending more, brokerage assets are up by double digits and our corporate clients are increasingly turning to us to help finance business expansion,” he said.

The bank declined to comment on the mortgage settlement.

Its shares fell 1.9 per cent on the day.