Tuesday, October 19, 2010
Bank of America Reports $7.3 Billion Loss, Citing Charges
Bank of America, the nation’s biggest bank, announced a rebound in operating profit in the third quarter, even as revenue dropped slightly from last quarter.
On a non-cash basis for the quarter, the bank reported a loss of $7.3 billion because of $10.4 billion writedown in the value of its credit card unit, which will be hurt by federal regulations that limit overdraft charges and other fees.
In recent days, Bank of America shares have been hammered as investors worried about the impact of the controversy over whether foreclosures had been done properly. After halting foreclosures across the country, Bank of America said Monday it was resuming the process in 23 states where court approval is required for a foreclosure to proceed.
For the third quarter, the bank earned $3.1 billion, or 27 cents a share. Wall Street had been expecting earnings of 16 cents a share, according to Thomson Reuters.
“We are adapting to the regulatory environment, credit quality continues to improve, and we are managing risk and building capital. We are realistic about the near-term challenges, and optimistic about the long-term opportunity,” the chief executive, Brian T. Moynihan, said in a statement.
In the same quarter a year ago, Bank of America reported a loss of $2.2 billion, or 26 cents a share.
In a positive sign for the broader economy, the bank reported that credit conditions among consumers strengthened in the quarter.
“Credit quality continues to improve,” Mr. Moynihan said.