BofA, Fleet, Others Post Higher Profits
Bank of America Corp. and FleetBoston Financial Corp., which are merging, Thursday posted higher fourth-quarter profits as consumer lending rose and bad loans fell.
Two other banks, Wachovia Corp. and National City Corp., also reported higher profits, and National City said it would restate three years of results.
Profit rose 4% at Bank of America and almost tripled at Fleet. Profit rose 23% at Wachovia and almost doubled at National City. Commercial borrowing remained sluggish, though Bank of America said it saw signs of a turnaround.
Shares of Bank of America, Fleet and Wachovia fell Thursday, though most other components of the Standard & Poor’s bank index rose. J.P. Morgan Chase & Co. on Wednesday agreed to buy Bank One Corp. for $58 billion, which investors said might spur more banking consolidation.
Bank of America shares fell 57 cents to $78.68, Fleet shares fell 48 cents to $42.60, and Wachovia shares fell 75 cents to $46.55. Shares of National City, which some analysts consider a potential takeover target, rose 93 cents to $33.62. The S&P; bank index rose nearly 1.6%.
Bank of America, the No. 3 U.S. bank, said net income rose to $2.73 billion, or $1.83 a share, from $2.61 billion, or $1.69, a year earlier. Revenue rose 9% to $9.79 billion.
Charlotte, N.C.-based Bank of America said consumer and commercial banking profit rose 11% to $1.91 billion, corporate and investment banking profit nearly tripled to $576 million, and asset management profit more than doubled to $262 million. Bad loans fell 50% to $583 million.
The bank also said Lynn Pike, a former Wells Fargo & Co. executive in Southern California, would become president of its California operations, succeeding Liam McGee, who is moving to North Carolina as president of consumer banking for the combined BofA and Fleet. Pike, who has been FleetBoston’s managing director of consumer banking since May 2002, also will serve as BofA’s national president for small-business banking.
Fleet, the No. 7 bank, posted fourth-quarter profit of $732 million, or 68 cents a share, up from $261 million, or 24 cents, a year earlier. The Boston-based bank in the quarter set aside just $195 million overall, 74% less than a year earlier, to cover bad loans, as credit conditions in Argentina improved.
Wachovia, the No. 5 bank, said fourth-quarter profit rose to $1.1 billion, or 83 cents a share, from $891 million, or 66 cents, a year earlier. Revenue rose 23% to $5.53 billion.
National City, the No. 10 bank, said fourth-quarter profit rose 94% to $544 million, or 88 cents a share, as increased consumer lending offset weak commercial lending and a slowdown in mortgage refinancings.
The Cleveland-based bank said it would restate results back to 2001 after the SEC questioned its accounting for some hedging programs.
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Times staff writer E. Scott Reckard contributed to this report, and Reuters was used in compiling it.
