Bank of America Corp, the second-largest U.S. bank, said third-quarter profit fell steeper than expected, on mounting credit losses and the market impact on its investment banking unit.
Net income fell to $3.7 billion, or 82 cents per share, from $5.42 billion, or $1.18, a year earlier the Charlotte, North Carolina-based bank said with shares falling $1.72, or 3.4 percent, to $48.31 in pre-market trading.
"While the significant dislocations in the capital markets have hurt most participants, we are still very disappointed in our third quarter performance," Ken Lewis, the company's CEO said in a prepared statement.
Downturn
Bank of America's net interest income rose to $8.62 billion from $8.59 billion, while its provision for credit losses increased to $2.03 billion from $1.17 billion a year ago.
The news sent U.S. stock futures down and U.S. Treasury prices higher, on expectations slowing activity might prompt the U.S. Federal Reserve to cut interest rates.
Results included a 93 percent decline, to $100 million from $1.43 billion, in earnings from corporate and investment banking.
The bank also set aside an additional $865 million for rising consumer and small-business credit costs.
Total average assets at Sept. 30 stood at $1.58 trillion, up from $1.5 trillion on the same date during 2006.
October 18 2007
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