BofA earnings rise on loan growth Bank of America reported fourth-quarter net income of $2bn on Thursday, celebrating strong loan growth from corporate America even as its investment bank fell into a loss. Earnings of 15 cents a share compared with a loss of $1.2bn, or 16 cents a share, in the same period in 2010. Revenue rose 11 per cent to $25.1bn. The bank, whose stock was the laggard last year in a dismal sector, has struggled to escape from toxic mortgage losses and litigation, largely the result of its disastrous acquisition of Countrywide, the mortgage issuer, at the height of the crisis. BofA took a $1.5bn mortgage-related litigation expense in the quarter, adding to the multi-billion dollars it has had to devote to the problem. Separately, the bank increased its reserve for claims that it breached underwriting standards on mortgages by $263m to $15.6bn. The bigger increase came earlier in the year when BofA raised its reserves from $5.4bn. Some analysts maintain that BofA is still underpricing the eventual tally of mortgage losses. But Thursday's results beat analysts" estimates and allowed BofA to record a slight full-year profit of 1 cent a share or $1.4bn. In pre-market trading, BofA's stock rose by more than 6 per cent. Loan growth from traditional banking outpaced the investment bank where, like JPMorgan Chase and Goldman Sachs, BofA suffered sharp revenue declines. Like Citigroup, its investment bank fell into a loss. "We enter 2012 stronger and more efficient after two years of simplifying and streamlining our company," said Brian Moynihan, chief executive. Mr Moynihan has led a programme of shrinking the bank, selling non-core assets and cutting jobs in an attempt to satisfy regulators over its capital position. This caused BofA to cede the number one spot in US banking by assets to JPMorgan Chase in 2011. But it also helped the bank increase its capital levels. Under the current Basel I capital standard, core "tier one common equity" capital rose from 8.65 per cent in the previous quarter to 9.86 per cent. Among its businesses, the investment bank recorded a net loss of $433m compared with net income of $669m a year earlier as sales and trading revenue declined 44 per cent, or by 21 per cent stripping out the impact of a distortive accounting treatment known as debt valuation adjustment. The commercial banking division recorded flat net income of $1bn as reduced revenue was offset by lower credit losses. The consumer real estate services division was hit by the higher litigation expenses and fell to a fourth-quarter loss of $1.5bn compared with a loss of $4.9bn a year earlier. The credit card division recorded lower profits of $1bn compared with $1.3bn a year earlier. BofA made $141bn in net income from deposits against a $200m in the same period last year. Its global wealth management division, including the Merrill Lynch brokerage, saw net income decline from $319m to $249m.