Bank of America Corp, the second-biggest US lender, said first-quarter profit rose 11 percent as consumer loans increased and fees from money management and investment banking rose.

　　Net income increased to US$2.68 billion, or US$1.83 a share, from US$2.42 billion, or US$1.59 a share, according to a company statement. The Charlotte, North Carolina-based bank said revenue increased 6.9 percent to US$9.5 billion.

　　Chief Executive Officer Kenneth Lewis, 57, has focused on adding more checking accounts and increasing consumer lending to boost profit as interest rates remained near four-decade lows. Profit in the quarter doesn't include results from the bank's US$47 billion takeover of FleetBoston Financial Corp this month.

　　"The consumer business has been very strong for them and for everybody," said Lisa Welch, who helps manage about US$5 billion in financial services stocks, including Bank of America shares, at John Hancock Financial Advisers Inc in Boston.

　　With FleetBoston, Bank of America now has 5,700 consumer offices in 29 states, more than any US bank. Its consumer business has about 33 million customers and the bank runs the nation's fifth-biggest credit-card issuer. Lewis has said the company has increased its deposits and new checking accounts in the quarter.

　　The bank expects to increase its mortgage lending in the US northeast and sell more credit cards through Fleet's 1,460 branches as it trims US$1.1 billion in costs by next year as part of the FleetBoston merger. Some of the cost savings will come from the elimination of 12,500 jobs.

　　Mortgage fees dropped 48 percent to US$209 million in the quarter as refinancing declined.

　　Bank of America agreed to settle the mutual-fund allegations last month with the Securities and Exchange Commission and New York Attorney General Eliot Spitzer's office. Pretax costs related to the settlement in the quarter were US$275 million.

　　It still faces probes into allegations of biased stock research and for its role in financing Parmalat Finanziaria SpA, the bankrupt Italian food company, FleetBoston separately paid US$140 million to settle a mutual-fund trading investigation.

　　The bank wrote off US$720 million in bad loans, a 14 percent decline from a year earlier. Its losses included US$106 million in loans related to Parmalat. The bank also said it wrote down US$29 million in derivatives linked to the food company.

　　(Bloomberg News)