BofA loses $5.2B in 4Q as it repays bailout
Man, Ken would have been stomped with the pay czar's gestapo boot had he still been at the helm.
CHARLOTTE, N.C. (AP) -- Bank of America Corp.
said Wednesday it lost $5.2 billion during the final three months of
2009 as consumers struggled to make mortgage and credit card payments
and the bank repaid its government bailout money.
of America said its loss, which reflected the payment of preferred
dividends, compared with a loss of $2.4 billion a year earlier. The
bank, which was one of the hardest hit by the credit crisis and
recession, said its results were boosted by strong results from its
Merrill Lynch investment banking operations that it acquired a year ago
The report fell in line with those of
JPMorgan Chase & Co. and Citigroup Inc., both of which had billions
in losses from bad loans offset by investment banking income. The
industry's results are a concern for economists and investors, who
question whether the economy can have a sustained strong recovery if
consumers are still defaulting on loans.
Brian Moynihan echoed those concerns in a statement, saying, "economic
conditions remain fragile and we expect high unemployment levels to
continue, creating an ongoing drag on consumer spending and growth."
N.C.-based Bank of America lost 60 cents per share during the fourth
quarter, more than the 52 cents analysts were expecting, according to
Thomson Reuters. But investors appeared unfazed; the bank's stock was
up 11 cents at $16.43 in pre-opening trading.
The bank set aside $10.1 billion to cover soured loans, down nearly 14 percent from the previous quarter.
Citigroup, Bank of America said it saw some signs of improvement in its
loan portfolios. The company said it charged off $8.4 billion in loans
during the quarter, down $1.2 billion from the third quarter. Loans are
charged off when they are considered uncollectible.
credit costs remained high, with the bank's credit card unit posting a
$1.03 billion loss, well above a $9 million loss a year ago.
addition of Merrill Lynch supported the bank's results. But Bank of
America said its global wealth and investment management unit saw its
net income rise to $1.3 billion in the quarter, up from $515 million a
year earlier, driven by the addition of Merrill Lynch.
of America said $4 billion of its fourth-quarter loss came from the
costs of paying back $45 billion in government bailout money in
JPMorgan Chase, which last Friday
reported a $3.28 billion fourth-quarter profit, also said its
investment banking earnings offset losses from loans. Many analysts
predict loan losses should peak some time in the first half of 2010.
Tuesday, Citigroup said it lost $7.58 billion in the fourth quarter as
consumers continued to struggle to repay loans and the bank repaid its
government bailout. The bank said it set aside $8.18 billion to cover
bad loans during the most recent quarter.
who became CEO on Jan. 1, has said Bank of America's decision to pay
back the government loans was a major step in bringing back employee
and shareholder confidence. It also freed the bank from restrictions on
how much it could pay employees.
America's has about 53 million customers, including individual
consumers and businesses. That breadth makes BofA particularly
vulnerable to high unemployment, which currently sits at 10 percent.
Moynihan, 50, became CEO after Ken Lewis retired.
the full year, Bank of America lost $2.2 billion, or 29 cents per
share. It earned $2.56 billion, or 54 cents per share in 2008.