Bank of America and Citigroup miss profit forecasts

Profits at Bank of America (BoA) and Citigroup for the last three months of 2014 have both undershot estimates.

BoA earned $3.05bn (£2bn) compared with a profit of $3.44bn last year, as total revenue fell 12.6% to $18.96bn.

Citigroup’s income fell to $346m after the bank took charges of $3.5bn to settle legal claims and restructure operations.

The legal costs involved allegations over manipulation of currency markets and the Libor interest rate.
BoA’s record $16.7bn in fines and compensation for misleading investors was largely paid off last year, following a deal with the US Department of Justice.

Both banks have been restructuring, with BoA cutting some 16,000 jobs last year and Citigroup pulling out of consumer banking in several international markets.

They are facing pressure from politicians, such as Democrat Senator Elizabeth Warren, who have called for the break up of Citigroup, Bank of America and other “too big to fail” US banks. But will not hesitate to bail them out if they get in trouble.

Shares in both banks are down about 10% so far this year.

-Source http://m.bbc.com/news/business-30833401

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