Bank of America Benefits from New Purchases

Bank of America is US largest bank. It has recently made some new purchases that have increased its already great net income. Only first quarter net income of the Bank of America has gone up to $2.2 billion from $1.2 billion during the same time period in 2008.

Lately, Bank of America bought the lender company Countrywide, which is said to have added to the mortgage business of the bank. Similarly, the freshly acquired Merrill Lynch has contributed a highly large share of $3.7 billion in the net income of the largest bank of America. It acknowledges the “outstanding performances” of Countrywide and Merrill Lynch.

These figures indicate a brighter future for banking sector. Bank of America was granted $20 billion in January in fresh US government aid, and also, $118 billion worth of guarantees against bad assets. In total, $45 billion has been received by the Bank as government funds.

“We continue to face extremely difficult challenges, primarily from deteriorating credit quality driven by weakness in the economy and growing unemployment,” said chief executive Kenneth Lewis.

To cover the credit losses, bank of America had to set aside $13.38 billion, too. Thus, in pre opening trading, its shares fell by 8.1 %.