Bank of America, the second largest US bank, said quarterly profit rose 11 per cent and topped Wall Street estimates, on growth in consumer lending, credit cards, investment and brokerage services, and fees.
The bank today posted a first-quarter net income increase to $2.68 billion, or $1.83 per share, from $2.42 billion, or $1.59 per share, a year earlier.
Results include a charge of 16 cents per share to settle accusations that Bank of America let favored clients improperly trade mutual funds.
Reported results exclude FleetBoston Financial which Bank of America bought for about $48 billion on April 1st.
"Expectations have been pretty low for whether Bank of America could put two big banks together, and when the fine came along people became more skeptical because of the size," said Mr Wayne Bopp, an analyst at Fifth Third Investment Advisors.
"The decent earnings report should calm investor fears." Excluding the charge, which was $285 million pre-tax, earnings were $1.99 a share, bank spokeswoman Ms Eloise Hale said.
Revenue rose 7 per cent to $9.69 billion, while expenses rose 15 per cent to $5.42 billion. Expenses rose 9 per cent without the charge, Ms Hale said.
Bank of America and Fleet together agreed to pay $515 million and give up $160 million in fees to settle mutual fund investigations.
Bank of America also charged off $106 million of loans and wrote down about $29 million of derivative exposure related to Parmalat, after writing off $114 million in the prior quarter.
The bank had been a lead Parmalat banker before the Italian food company slid into insolvency.
Shares of Bank of America were down 20 cents at $80.30 in early trade on the New York Stock Exchange. Wall Street was slightly lower after a report showing consumer prices rose sharply above expectations stoked fears the Federal Reserve may increase interest rates sooner than expected.