Bank of America profits fall due to mortgage losses

Bank of America Merrill Lynch has reported a 38% decline in profits for the first three months of 2011 compared with a year earlier.

It made a profit of $2bn (£1.23bn), but the bank's residential mortgage unit lost $2.39bn, as debts were not repaid.

High unemployment and falling property prices have seen many US households falling behind on their mortgages.

Analysts were disappointed by the figures which came after unexpectedly good results from rival JP Morgan.

"I think the reason seems to be Bank of America is struggling with the mortgage mess and cleaning up what is going on there," said David Morrison a market strategist at GFT Global Markets.

The first quarter result was, however, an improvement on the loss of $1.2bn dollars made in the final quarter of 2010.