US banks continue to struggle
(22 January 2010 – USA) Losses amongst the major banks in the United States have dampened the spirits of the banking sector as banks repay bailouts from the financial crisis.
The Bank of America (BoA), the largest US bank by assets, reported a US$194 million (A$213 million) loss this week. However, after making a US$4.0 billion repayment to the government for its aid during the financial crisis, as well as preferred dividends, the loss was propelled up to US$5.2 billion for the fourth quarter.
The net income for the bank was US$6.3 billion for 2009, however payments to the US government resulted in an overall loss of US$2.2 billion for shareholders.
Brian Moynihan, chief executive officer, BoA, said that while it's disappointing to report a loss for the fourth quarter, there were a number of important accomplishments worth noting.
Mr Moynihan highlighted that firstly, the bank repaid the American taxpayer, with interest, for the TARP investment. Secondly, BoA has taken steps to strengthen its balance sheet through successful securities offerings. And thirdly, all of the non-credit businesses recorded positive contributions to the bank’s results.
US financial institution Citigroup also reported a 2009 fourth quarter net loss this week of US$7.6 billion (A$8.2 billion) or US$0.33 per share, contributing to an overall loss of US$1.6 billion for the full year.
Excluding the US$6.2 billion after-tax loss associated with TARP repayment and exiting the loss-sharing agreement, the fourth quarter net loss was US$1.4 billion or US$0.06 per share.
For all of 2009, Morgan Stanley posted a profit of US$1.34 billion but shareholders suffered a loss of US$907 million.
Morgan Stanley's chief executive and president, James Gorman, said he was confident that the bank would improve its position further as the economy recovered from the worst recession in decades.
The net income for the bank was US$6.3 billion for 2009, however payments to the US government resulted in an overall loss of US$2.2 billion for shareholders.
Brian Moynihan, chief executive officer, BoA, said that while it's disappointing to report a loss for the fourth quarter, there were a number of important accomplishments worth noting.
Mr Moynihan highlighted that firstly, the bank repaid the American taxpayer, with interest, for the TARP investment. Secondly, BoA has taken steps to strengthen its balance sheet through successful securities offerings. And thirdly, all of the non-credit businesses recorded positive contributions to the bank’s results.
US financial institution Citigroup also reported a 2009 fourth quarter net loss this week of US$7.6 billion (A$8.2 billion) or US$0.33 per share, contributing to an overall loss of US$1.6 billion for the full year.
Excluding the US$6.2 billion after-tax loss associated with TARP repayment and exiting the loss-sharing agreement, the fourth quarter net loss was US$1.4 billion or US$0.06 per share.
For all of 2009, Morgan Stanley posted a profit of US$1.34 billion but shareholders suffered a loss of US$907 million.
Morgan Stanley's chief executive and president, James Gorman, said he was confident that the bank would improve its position further as the economy recovered from the worst recession in decades.
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