Bank of America said Monday it made more money in the first quarter than it did in all of 2008, blowing away analysts' predictions and the profits of every other bank so far. But even that couldn't please investors, who believe that more bad news is on the horizon. The bank's shares fell through the day, plunging 24 percent.
The Charlotte bank's profits were boosted significantly by several one-time gains, such as selling part of its stake in a Chinese bank. That made analysts nervous about the forecast for continued profits.
The bank is also suffering as more consumers default on loans of all types, though corporate and investment banking operations fared relatively well. That's an about-face from the previous few quarters, when the bank emphasized the strength of its core, bread-and-butter loans while paring down investment banking.
Alois Pirker, a senior analyst at the Aite Group, said he remains skeptical that Bank of America will post a profit for the full year because of large exposures in credit cards and mortgages, which suffer in a weak economy.
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"Don't get fooled into thinking it's the end of the crisis," Pirker said. "We've seen how quickly profits are wiped out. I think they have huge (consumer) risks waiting around the corner."
To read the complete article, visit www.charlotteobserver.com.