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Bank of America posts $2.24 billion loss
written by Associated Press
Friday October 16, 2009
Rising loan losses (FORECLOSURES) at bank show consumers are still struggling.
CHARLOTTE, N.C. - Bank of America Corp. said Friday it lost more than $2.2 billion in the third quarter as loan losses kept rising, providing further evidence that consumers are still struggling to pay their bills.
The nation's second-largest bank said it wrote down loans on its books by almost $10 billion during the July-September period, up almost $1 billion from the second quarter. The bank also added $2.1 billion to its reserves to cover bad loans, bringing its provision for credit losses to $11.7 billion. The bank's total allowance for loan and lease losses now totals $35.83 billion.
Bank of America's results were aided by profit from its wealth management business, which includes the bank's Merrill Lynch division. While the acquisition of Merrill Lynch has brought widespread criticism and legal problems for Bank of America, the deal was paying off during the third quarter, when Merrill Lynch's revenue and profit more than doubled from a year ago.
The bank's earnings follow the pattern set earlier this week by Citigroup Inc. and JPMorgan Chase & Co., which also reported more loan losses during the third quarter as consumers struggled to keep up with their credit card and mortgage payments. And on Friday, General Electric Co. reported that its GE Capital business, which includes credit cards, saw an 87 percent drop in profits, although it was also weighed down by commercial real estate losses.
Together, the reports depict a financial industry that is still deeply troubled, although the trading operations at companies like Bank of America, JPMorgan and Goldman Sachs Group Inc. mitigated some of the bad news.
Banks have predicted for some time that their loan losses would keep rising. And Bank of America's CEO Ken Lewis confirmed that this trend continues.
"Based on (the) economic scenario, results in the fourth quarter are expected to continue to be challenging as we close the year," Lewis said on a conference call with analysts.
Bank of America is considered particularly vulnerable to unemployment, which climbed last month to 9.8 percent in the U.S. Economists predict the jobless rate will pass 10 percent in the coming months.
Bank of America posts $2.24 billion loss
written by Associated Press
Friday October 16, 2009
Rising loan losses (FORECLOSURES) at bank show consumers are still struggling.
CHARLOTTE, N.C. - Bank of America Corp. said Friday it lost more than $2.2 billion in the third quarter as loan losses kept rising, providing further evidence that consumers are still struggling to pay their bills.
The nation's second-largest bank said it wrote down loans on its books by almost $10 billion during the July-September period, up almost $1 billion from the second quarter. The bank also added $2.1 billion to its reserves to cover bad loans, bringing its provision for credit losses to $11.7 billion. The bank's total allowance for loan and lease losses now totals $35.83 billion.
Bank of America's results were aided by profit from its wealth management business, which includes the bank's Merrill Lynch division. While the acquisition of Merrill Lynch has brought widespread criticism and legal problems for Bank of America, the deal was paying off during the third quarter, when Merrill Lynch's revenue and profit more than doubled from a year ago.
The bank's earnings follow the pattern set earlier this week by Citigroup Inc. and JPMorgan Chase & Co., which also reported more loan losses during the third quarter as consumers struggled to keep up with their credit card and mortgage payments. And on Friday, General Electric Co. reported that its GE Capital business, which includes credit cards, saw an 87 percent drop in profits, although it was also weighed down by commercial real estate losses.
Together, the reports depict a financial industry that is still deeply troubled, although the trading operations at companies like Bank of America, JPMorgan and Goldman Sachs Group Inc. mitigated some of the bad news.
Banks have predicted for some time that their loan losses would keep rising. And Bank of America's CEO Ken Lewis confirmed that this trend continues.
"Based on (the) economic scenario, results in the fourth quarter are expected to continue to be challenging as we close the year," Lewis said on a conference call with analysts.
Bank of America is considered particularly vulnerable to unemployment, which climbed last month to 9.8 percent in the U.S. Economists predict the jobless rate will pass 10 percent in the coming months.
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