Bank of America Corporation says that their 2006 net income rose 28 percent to USD21.13 billion from USD16.47 billion a year earlier, reflecting both the addition of MBNA at the start of the year and organic growth in most major customer segments.
Per share earnings increased 14 percent to USD4.59 per diluted share from USD4.04 per share last year. Return on average common equity for the year was 16.27 percent. Excluding pre-tax merger and restructuring charges of USD805 million, or 11 cents per share, Bank of America earned USD21.64 billion, or USD4.70 per share, for the full year 2006.
In the fourth quarter of 2006, net income was USD5.26 billion, or USD1.16 per diluted share, compared with USD3.57 billion, or USD0.88 per share, a year earlier. Excluding pre-tax merger and restructuring charges of USD244 million, equal to 3 cents per share, earnings per share were USD1.19. For the fourth quarter of 2005, pre-tax merger and restructuring charges were USD59 million, or 1 cent per share.
The increase in 2006 earnings was driven by growth in card income, including the addition of MBNA, strong growth in capital markets and investment banking activities, and increased equity investment gains. These improvements were partially offset by higher credit costs, again in part because of the addition of MBNA. For the year, revenue on a fully taxable-equivalent basis increased 30 percent while expenses rose 24 percent.
“Bank of America had another strong year in 2006,” says Kenneth D. Lewis, the chairman and chief executive officer of the Bank of America. “We created opportunities for our customers and clients through improved service, product innovations such as the USD0 Online Equity Trade program and Business 24/7 for small businesses, new more convenient ATMs and excellent investment performance in our Columbia Funds. Our capital markets groups served more clients than ever before, increasing our market share in important product categories. In short, our associates are proving that when you combine listening to customers to understand their needs with our advantages of scale, innovation and execution, it creates a powerful value proposition that wins in the marketplace.”