Shrinking legal expenses helped the U.S. second largest bank swing to a profit in the latest quarter. Wells Fargo's profit rose as it issued more home loans. Fred Katayama reports.
Shrinking legal expenses helped Bank of America swing back into the black in the latest quarter. That's a sharp contrast to last year, when it dished out billions to settle a U.S. government probe over mortgage securities. The U.S.' second largest bank also boosted profit by sharply cutting costs for handling delinquent loans. UBS analyst Brennan Hawken said, "We view these results as encouraging given the difficult environment." Revenue slipped, partly owing to low interest rates. And adjusted trading revenue fell, albeit slightly less than rival JPMorgan Chase's decline. Bank of America shares rose at the start of trading. They are down 13 percent this year, underperforming rivals. Separately, Wells Fargo's quarterly profit and revenue rose, helped by its purchase of loans from GE Capital. The bank, considered a barometer of the housing market, issued more home loans, but its mortgage banking income fell from last year. Wells Fargo shares trimming their 5 percent loss this year in early trading.