Bank of America reports $2.5 billion profit
Jeremy Hobson: Well Bank of America just reported its quarterly earnings and they’re better than expected: $2.5 billion in profit.
Marketplace’s Scott Tong reports on what that tells us about the U.S. economy.
Scott Tong: BofA is reporting higher mortgage banking income — another suggestion that the housing market may have hit bottom and turning up.
We ran the numbers by economist Lawrence White of the Stern School of Business at NYU.
Lawrence White: They reflect what looks to be the stabilizing of housing, and the modest improvements in the U.S. economy.
Residential lending grew to $18 billion last quarter, and fewer loans went sour. Bank of America has trailed the competition lately. It’s still climbing out of a hole it dug when it bought subprime lender Countrywide Financial in 2008.
The next big question: will it be implicated in the international banking LIBOR scandal for helping doctor a interest rate?
White: My best guess is, they’re going to be on the wrong end of nine-digit penalties, fines.
On Main Street, you may be seeing fewer Bank of America branches. Right now it’s cutting costs and thousands of workers.
I’m Scott Tong for Marketplace.
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