Bank of America pointing to fresh US growth

Signs of a pick-up in the US economy and gains from asset sales helped Bank of America post a quarterly profit yesterday, but the group still needs more capital.

The second-largest US bank said it was considering issuing $1 billion (£647 million) in shares to certain employees in lieu of a portion of their year-end cash bonuses next month.

The move could further bolster the bank’s capital levels, but at the same time dilute shareholders’ interest and may stir discontent among some bankers.

Yesterday’s results showed that the group made a net profit of $1.58bn in the fourth quarter, compared with a loss of $1.6bn a year earlier.

Like rivals Wells Fargo, JPMorgan Chase and some regional banks, Bank of America reported loan growth in the fourth quarter, potentially boding well for the US economy.

But, in line with the likes of Citigroup and Goldman Sachs, the group was also hurt by lacklustre trading and investment banking revenue as clients hit by the European debt crisis shunned capital markets and put off deals.

l The number of Americans filing for new jobless benefits dropped to a near four-year low last week, pointing to some building up of momentum in the economy.