Xenophilia (True Strange Stuff)

Blog of the real Xenophilius Lovegood, a slightly mad scientist

Bank of America loses $2.24B as loan losses rise

Posted by Anonymous on October 16, 2009

In this photo made Wednesday, Sept. 30, 2009, a branch office of Bank of America Bank of America Corp. said Friday it lost more than $2.2 billion in the third quarter as loan losses kept rising, providing more 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 theJan. 1 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, joining his counterparts at JPMorgan and Chase, confirmed that this trend will continue into the near future as unemployment rises and consumers keep struggling.

via Bank of America loses $2.24B as loan losses rise – Yahoo! News.

About these ads

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
Follow

Get every new post delivered to your Inbox.

Join 885 other followers

%d bloggers like this: