Bank of America's Securities Profit Swings $12.1 Billion

Bank of America reported Wednesday morning that its global securities business produced net income of $7.1 billion in 2009, a swing of $12.1 billion over 2008. The 2009 results include the acquisition of Merrill Lynch, announced in September 2008 and completed on Dec. 31, even as the brokerage╒s losses from subprime assets exceeded then-chief executive Kenneth Lewis╒ expectations.

Revenues for its Global Markets unit, which includes fixed income, currency and commodity trading as well as equities operations, reached $20.6 billion, a swing of $24.4 billion. In 2008, the comparable figures were negative revenue of $3.8 billion and a net loss of $4.9 billion.

Fixed income, currency and commodities revenue reached $14.9 billion, the company said, driven by sales and trading revenues of $12.7 billion. ╥Credit products benefited from improved market liquidity and tighter credit spreads,╒╒ the company said, in its earnings summary.

Equities revenue of $5.7 billion was driven by the addition of Merrill Lynch and ╥positive market sentiment. In the fourth quarter, the markets unit reported net income of $1.1 billion.

Fourth-quarter net income increased $4.8 billion compared with a net loss of $3.7 billion a year earlier.

Global Wealth and Investment Management net income in 2009 rose to $2.5 billion, also driven by the addition of Merrill Lynch, from $1.4 billion. Net revenue more than doubled to $18.1 billion, from $7.8 billion.

Overall, Bank of America Corporation reported 2009 net income of $6.3 billion, compared with net income of $4.0 billion in 2008. But its shareholders did not fare so well. When the company counted preferred stock dividends and the impact of repaying the U.S. government's $45 billion preferred stock investment in the company under the Troubled Asset Relief Program (TARP), income applicable to common shareholders was a net loss of $2.2 billion, or $0.29 per diluted share.That compared with 2008 net income applicable to common shareholders of $2.6 billion, or $0.54 per diluted share.

In the fourth quarter of 2009, the company's net loss narrowed to $194 million from a loss of $1.8 billion a year earlier.

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