Banks report record profits despite massive legal fees

The nation’s major banks reported record fourth-quarter profits Wednesday, with Bank of America announcing that its profit jumped to $3.44 billion from $732 million in the same quarter in 2012, and Wells Fargo edging out JPMorgan Chase as the nation’s most profitable bank.
The jump represents a major turnaround for Charlotte, N.C.-based Bank of America, the country’s second-largest bank, which was hit last year by an $11.6 billion settlement with home mortgage giant Fannie Mae.
The settlement is the result of the bank’s involvement in the subprime mortgage crisis of 2007–08, which contributed to the massive financial crisis and subsequent recession in the U.S. As a result of the crisis, more than 6 million homeowners have an underwater mortgage, meaning they are paying more than what their house is worth.

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Photo: EMMANUEL DUNAND/AFP/Getty Images

Banks report record profits despite massive legal fees

The nation’s major banks reported record fourth-quarter profits Wednesday, with Bank of America announcing that its profit jumped to $3.44 billion from $732 million in the same quarter in 2012, and Wells Fargo edging out JPMorgan Chase as the nation’s most profitable bank.

The jump represents a major turnaround for Charlotte, N.C.-based Bank of America, the country’s second-largest bank, which was hit last year by an $11.6 billion settlement with home mortgage giant Fannie Mae.

The settlement is the result of the bank’s involvement in the subprime mortgage crisis of 2007–08, which contributed to the massive financial crisis and subsequent recession in the U.S. As a result of the crisis, more than 6 million homeowners have an underwater mortgage, meaning they are paying more than what their house is worth.

Read more

Photo: EMMANUEL DUNAND/AFP/Getty Images