Bank of America posts $1.4 bn profit amid asset sale

Bank of America on Thursday said it had posted a $1.4 billion profit in 2011, wiping away a brutal loss the year before amid savage streamlining of the firm. "We enter 2012 stronger and more efficient after two years of simplifying and streamlining our company," said Chief Executive Officer Brian Moynihan, announcing a swing away from the $2.2 billion loss seen in 2010. The bank -- one of the most prominent in US towns and cities -- said it had generated $34 billion in proceeds from the sale of "non-core assets and businesses," cash used to shore up the bank's balance sheet. One big-ticket item was the sale of shares in the China Construction Bank (CCB). In August the struggling US banking giant sold roughly half of its 10 percent share in the company for $8.3 billion, strengthening its capital base and better implementing tougher standards imposed by global regulators. In the fourth quarter, $2.9 billion more was gleaned from the sale of CCB shares. In a sign that the ripple effects of the 2008 financial crisis are not yet in the rear-view mirror, the firm spent $1.5 billion on "mortgage-related litigation expense" during 2011. Bank of America has struggled to recover from the 2008 financial meltdown and its disastrous acquisition of troubled mortgage lender Countrywide Financial, which has resulted in lawsuits after the crash of the US housing market. Investors had been dumping the US bank's stock amid fears that its legal woes and the sluggish US economy would prevent it from raising enough capital to meet new regulatory standards imposed after the financial crisis. But Moynihan indicated the broader economic outlook was brightening for the Charlotte, North Carolina-based bank. "Reflecting a gradually improving economy," said Moynihan, "we saw solid business activity by companies of all sizes (during the fourth quarter)." In that quarter the company posted profits of $2.0 billion versus a loss of $1.2 billion in the same period a year before.