Bank of America suffers $1b quarterly loss
CHARLOTTE, N.C. - Bank of America Corp., the biggest US lender, posted its second quarterly loss in less than a year, unable to shake off effects of the economic contraction that drove the company to take two taxpayer bailouts.
The $1 billion third-quarter loss, or 26 cents per diluted share, compared with a profit of $1.18 billion, or 15 cents, a year earlier, the Charlotte-based bank said yesterday in a statement. The loss was more than analysts estimated and the only one posted by the nation’s three biggest lenders.
The quarterly report will be the last supervised by chief executive Kenneth Lewis, 62, who will retire Dec. 31. Regulators and shareholders criticized Lewis’s pursuit of Merrill Lynch & Co. The bank reported a fourth-quarter loss in 2008, its first in 17 years, and Lewis is trying to lead a rebound while fending off state and federal probes involving elements of the Merrill deal. He agreed yesterday to give up his 2009 salary and bonus.
“The idea that the financial crisis is over is a fantasy and it looks like the numbers bear that out,’’ said Harvard University professor Niall Ferguson. “It’s clearly not over for Bank of America.’’
Bank of America is the largest bank in Massachusetts, with 286 branches and roughly 8,000 employees. It accounted for about one-fifth of the state’s bank deposits as of the end of June. Its shares have rebounded fivefold since February, when they traded at less than $3, their lowest in more than 20 years, on concern that the federal government would seize a stake in the company.
The stock closed yesterday at $17.26, down 84 cents.
Lewis has been under fire for not disclosing losses at Merrill Lynch and plans to pay $3.6 billion in bonuses at the firm before shareholders voted to approve the takeover in December. That sparked investigations by the Securities and Exchange Commission, Congress, and attorneys general in New York, North Carolina, and Ohio.
The quarter’s results, however, were aided by profit from Merrill Lynch, with gains from trading bonds, stocks, and currencies. Losses on home lending and insurance widened to $1.6 billion from $724 million, and the loss on credit cards expanded to $1.04 billion from $167 million. “Credit costs remain high, and that is our major financial challenge going forward,’’ Lewis said in the statement.
