Bank of America Corp reported a higher than expected profit for the third-quarter but its main businesses struggled as income from lending and investment banking was below par.
Following the announcement, its shares, that had fallen more than 50% since January, rose up considerably.
Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York, said, â€œEarnings were very good — surprisingly good — especially the revenue, surprisingly good in a very tough quarter.â€
Chief Executive Brian Moynihan is under pressure to bring round the bank struggling with mortgage losses and lawsuits. He said during a conference call, â€œThe key then now is going to be, as revenues are going to be more subdued, is to get more cost out.â€
Moynihan added, “We are working very hard to continue to work through the delinquent portfolio. There do continue to be some open items on mortgage. But we feel like we have done everything we can at this point.”
In late-morning trading, Bank of America shares were up 38 cents, or 6.3%, to $6.41.
Bill Hassiepen, senior analyst at credit rating agency Egan-Jones Ratings Co expressed his concern, “I’m not very pleased with the results. Core earnings appear very suspect.”
He also predicted that since the bank is expected to continue selling pieces of its mortgage servicing rights, it should be able to finish shedding its correspondent mortgage business by year-end.