Bank Of America Profits Fell 41 Percent, But Higher Than Expected

July 21, 2008 11:01 a.m. EST

Charlotte, NC (AHN) - Bank of America's second quarter profit fell to $3.41 billion, 41 percent below $5.76 billion earned in 2007. The profit decline translates into a $0.72 a share, higher than analyst estimates of $0.54.

Despite the drop in profits, Bank of America's shares rose 10 percent in New York trading Monday. Stock increased by $2.67 to $30.16 at 9:38 a.m. in the New York Stock Exchange composite and went up to $30.36.

The bank said its purchase of Countrywide Financial Corporation for $2.5 billion would boost its earnings this year. Kenneth Lewis, the bank's chief executive officer, said the bargain price paid for the lender coupled with the expected recovery of home sales would make up for the wave of mortgage defaults the financial community is dealing with.

Bank of America's second quarter financial figures indicated that four of the country's five largest banks have achieved better-than-expected earnings, which raised hopes the financial sector is slowly starting to recover from the credit crisis that had gripped the nation.