BoA reports US$1 billion loss
(19 October 2009 – USA) Bank of America (BoA) has reported a third-quarter 2009 net loss of US$1.0 billion (A$1.09 billion), after three other major US banks posted healthy results.
Total losses for shareholders were significantly larger, at US$2.24 billion or 26 cents per share, while the company, the largest US bank by assets, paid special dividends of US$1.2 billion, including US$893 million to the US government for its capital injections.
Despite the loss in the third quarter, the bank recorded net profit of US$6.5 billion for the first three quarters of the year.
The bank has not yet repaid the government for the US$25 billion bailout loan it received during the financial crisis under a program to shore up capital in the banking system, nor another US$20 billion it received to help the bank absorb Merrill Lynch.
BoA said that the quarterly results were negatively impacted by continued weakness in the U.S. and global economies and stress on the consumer, which continues to result in high credit costs.
Despite the loss in the period, the company strengthened its reserves, capital position and liquidity through efficient balance sheet and capital management.
Last week Citigroup posted a result of US$101 million in the third quarter after a tumultuous year, Goldman Sachs announced a profit of US$3.19 billion and JPMorgan Chase announced a jump to US$3.6 billion profit for the quarter.
The results from the banks suggest the US financial sector may be slowly recovering from its worst crisis in decades even as the US economy has yet to emerge from recession.
Kenneth D. Lewis, chief executive officer and president, BoA, said that the bank’s revenue continued to hold up well and that credit costs remain high; which is BoA’s major financial challenge going forward. However, the bank is heartened by early positive signs, such as the levelling of delinquencies among the credit card customers.
Despite the loss in the third quarter, the bank recorded net profit of US$6.5 billion for the first three quarters of the year.
The bank has not yet repaid the government for the US$25 billion bailout loan it received during the financial crisis under a program to shore up capital in the banking system, nor another US$20 billion it received to help the bank absorb Merrill Lynch.
BoA said that the quarterly results were negatively impacted by continued weakness in the U.S. and global economies and stress on the consumer, which continues to result in high credit costs.
Despite the loss in the period, the company strengthened its reserves, capital position and liquidity through efficient balance sheet and capital management.
Last week Citigroup posted a result of US$101 million in the third quarter after a tumultuous year, Goldman Sachs announced a profit of US$3.19 billion and JPMorgan Chase announced a jump to US$3.6 billion profit for the quarter.
The results from the banks suggest the US financial sector may be slowly recovering from its worst crisis in decades even as the US economy has yet to emerge from recession.
Kenneth D. Lewis, chief executive officer and president, BoA, said that the bank’s revenue continued to hold up well and that credit costs remain high; which is BoA’s major financial challenge going forward. However, the bank is heartened by early positive signs, such as the levelling of delinquencies among the credit card customers.
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