Bank of America joins in the recovery

BoA reported first quarter net income of 3.2 billion US dollars (2.1bn) against losses of 194 million dollars (125.6m) in the final three months of 2009.

Its profit cheer follows better-than-expected figures from fellow Wall Street major JP Morgan Chase & Co earlier this week, when the group posted a 54 per cent hike in profits.

The strong start to America's bank earnings season has spurred on UK listed banks.

BoA, which bought fellow investment bank Merrill Lynch at the height of the financial crisis, said its result reflected "a gradually improving economy".

Brian Moynihan, chief executive of BoA, said: "With each day that passes, the 2010 story appears to be one of continuing credit recovery."

Its better-than-expected profits came as strong trading revenue helped the bank offset continuing losses on consumer loans.

But BoA said losses in most consumer loans portfolios fell during the quarter, echoing similar comments from rival JP Morgan on Wednesday.

Money set aside by BoA to cover credit losses dropped by 3.6 billion dollars (2.3bn) in the first quarter compared with a year earlier.

However, the figures showed the ongoing effect of the banking woes on BoA, with bad debt charges still at a mammoth 9.8 billion dollars (6.3bn) and the first quarter net profits down 24 per cent on a year ago.