Bank of America lost $2.2 billion dollars in the latest quarter, the company said Friday.
The nation's biggest bank blamed the third-quarter performance on credit losses, particularly within some of its consumer-related businesses. The results were worse than Wall Street analysts had expected.
"Obviously, credit costs remain high, and that is our major financial challenge going forward," Bank of America CEO Ken Lewis said in a statement.
Lewis noted however, there were some encouraging signs, including a leveling off of delinquencies among the company's credit card customers, CNNMoney.com reports.
It was also reported, loans at least 30 days overdue are still growing, the bank said in a federal filing earlier this week. And aside from its roster of troubled consumer credit and loan products tied to the sagging mortgage market, Bank of America is beset with problems that run from Washington to civil courtrooms to its own boardroom.
In the third quarter, Bank of America added $2.1 billion to its reserves to cover more credit losses as unemployment surges and households struggle to keep up on their loans, and it spent more than $400 million to extract itself from an agreement with the government that guaranteed potential losses of its brokerage Merril Lynch.
Overall, the bank’s revenue grew by $26.4 billion, a 33 percent increase from $19.9 billion a year ago. The bank collected more retail deposits and made money on its investment business, but its finances were pummeled by losses on its businesses connected to home loans and consumer credit.
Now, as the recession gradually fades, questions loom about who can pull Bank of America back to profitability. Mr. Lewis announced in late September that he would step down at the end of the year, leaving a leadership vacuum as the bank searches for a successor who can restore the bank’s tarnished image and remove the government crutches holding it up, The New York Times reports.
In the meantime, Bank of America’s position as the largest U.S. consumer lender has hurt results since the recession began in December 2007. While Federal Reserve Chairman Ben S. Bernanke has said the economy may be growing again, the jobless rate rose to 9.8 percent in September, and Lewis said last month that “a near double-digit unemployment rate is bad medicine for a bank that serves consumers.”
Bank of America expects to add to its 20.5 percent share of U.S. home lending over the next five years, Barbara Desoer, president of home loans and insurance, said in an Oct. 14 interview.
"It has become hard to imagine Bank of America without Merrill Lynch," Lewis told employees in a September memo announcing his departure, Bloomberg reports.
US President Joe Biden and Iraqi Prime Minister Mustafa Al Qadimi signed an agreement on July 26 to formally end the USA's military presence in the country by the end of the year