BofA posts $1.2bn loss but Merrill performs

Bank of America, the largest US bank by assets, reported a second straight quarterly loss, driven by a $2bn (£1.25bn) writedown of its mortgage business.

The bank posted a fourth-quarter net loss of $1.2bn, or 16 cents a share, compared with a loss of $5.2bn, or 60 cents a share, a year earlier.

But shrugging off reports that its investment banking arm, BofA Merrill Lynch, was underperforming relative to peers, it said data firm Dealogic ranked it second worldwide for global investment banking revenues, with a 6.8 per cent market share.

“The company ended the year with No. 1 positions in both global and US rankings in leveraged loans and asset-backed securities,” it said in a statement.

“Bank of America Merrill Lynch participated in eight of the top ten investment banking deals of the year by fees and six of the top ten investment banking deals in the fourth quarter by fees.”

The bank's global banking and markets unit, which includes Merrill Lynch's former investment bank operations, reported quarterly profit of $724m.

Higher asset balances, plus a growing sense of optimism among investors, helped drive Merrill's revenue up 13 per cent to $3.55bn from the year-ago period.

Asset and wealth management fees also set a new record in the quarter, and the bank held $644bn in assets under management at 31 December, 2010.

Excluding the mortgage business writedown, the bank earned $756m, or four cents per share. Deposits rose to a record $1trn by the end of 2010, it said.

Last year's results included a one-time Troubled Asset Relief Program-related charge of $4bn.

"Last year was a necessary repair and rebuilding year," said President and Chief Executive Officer Brian Moynihan. "Our results reflect the progress we are making at putting legacy – primarily mortgage-related – issues behind us.”