Bank of America posts net loss of $1 billion
October 16, 2009 | 8:28
am
Bank of America Corp. reminded investors this morning how ugly conditions remain in some parts of the U.S. banking industry.
The nation’s largest bank reported a third-quarter net loss of $1 billion, mainly because of the continuing travails of U.S. consumers. In a measure of its plight, BofA became the only major financial institution to miss analysts’ third-quarter estimates.
BofA lost 26 cents a share after paying out $1.2 billion in dividends, including $893 million to the U.S. government. Analysts had expected a 12-cent loss. BofA earned $1.2 billion, or 15 cents a share, a year earlier.
On a slightly positive note, losses in its consumer businesses rose at a slower rate than earlier this year, the company said.
"Obviously, credit costs remain high, and that is our major financial challenge going forward,” BofA Chief Executive Kenneth Lewis said in a statement.
After rising sixfold from their March low, BofA’s shares sank more than 4% this morning and are off almost 7% in the last two days.
BofA’s woes contributed to a sell-off in the stock market that dragged the Dow Jones industrial average below 10,000. As of 8 a.m. PDT, the Dow was off about 100 points. General Electric Co. shares sagged 5.5% after its third-quarter profit fell 45% and revenue was less than analyst expected.
BofA’s poor results extend what already is a turbulent time for the company.
Lewis agreed to forgo his salary and bonus this year at the behest of the Treasury Department’s pay czar. In an unusual move, he’s returning about $1 million that he had been paid this year.
-- Walter Hamilton
The nation’s largest bank reported a third-quarter net loss of $1 billion, mainly because of the continuing travails of U.S. consumers. In a measure of its plight, BofA became the only major financial institution to miss analysts’ third-quarter estimates.
BofA lost 26 cents a share after paying out $1.2 billion in dividends, including $893 million to the U.S. government. Analysts had expected a 12-cent loss. BofA earned $1.2 billion, or 15 cents a share, a year earlier.
On a slightly positive note, losses in its consumer businesses rose at a slower rate than earlier this year, the company said.
"Obviously, credit costs remain high, and that is our major financial challenge going forward,” BofA Chief Executive Kenneth Lewis said in a statement.
After rising sixfold from their March low, BofA’s shares sank more than 4% this morning and are off almost 7% in the last two days.
BofA’s woes contributed to a sell-off in the stock market that dragged the Dow Jones industrial average below 10,000. As of 8 a.m. PDT, the Dow was off about 100 points. General Electric Co. shares sagged 5.5% after its third-quarter profit fell 45% and revenue was less than analyst expected.
BofA’s poor results extend what already is a turbulent time for the company.
Lewis agreed to forgo his salary and bonus this year at the behest of the Treasury Department’s pay czar. In an unusual move, he’s returning about $1 million that he had been paid this year.
-- Walter Hamilton
BofA?
Stick a fork in those bloodsuckers.
Enough of bailing out their corporat officers at taxpayer expense.
They are DONE!
One more point. All patriotic Americans should boycott this, and all the other TARP banks.
Posted by: jojo | October 16, 2009 at 08:49 AM
I'm sure all the execs will still get bonuses...
Posted by: Derek | October 16, 2009 at 09:28 AM
yeah, ken lewis, what about all those stock holders and average joes buying up BAC stock in the upcomming months and weeks before the price plunged - all the while with lewis cheerleading the high dividend and stablity etc. to get as much cash into BAC as possible - when does puffing turn into misrepresentation? when do so many average people recoup their dramatic losses on Band of america? how has lewis earned 68 million - which is obscene on a money loosing company that took tax payer money?? instead of caring about brook astor and her estate what about this atrocity? does anybody even care about these fundamental problems and inequitable outcomes such as this? it hurts all of us.
Posted by: sancho-2 | October 16, 2009 at 11:42 AM
If they would loan some money to small business, and to would be home owners, with solid credit, and solid jobs that pay well, and most of us fall into that category, maybe they would earn some money. But they are sitting on their money. They won't earn anything if they don't loan it out. It is the same with all these banks that got Tarp money. They sit on it; they don't loan it out. If there is 10% unemployment, there is 90% employment. The government has got to force them to loan the money they got. That is why they got it.
Posted by: Joanne | October 16, 2009 at 05:34 PM
I have an idea... How about you take persoanl responsibility and not gamble your hard eardned money! You can choose to stick it in a FDIC bank account and collect small interest payments. At least you know your money will still be there in the morning. You can also have peace of mind that your not going to let the banks rake you over the coals.
Posted by: Lilanya | October 18, 2009 at 12:48 AM
Good Lilanya,
Personal responsibility is only for little people. Bankers who steal your money, making false promises, and losing $1 BILLION get rewarded with $68 million in bonuses and pension benefits. That's OK because its investors fault for not keeping their money in a savings account at 0.25% interest.
Posted by: b3sci | October 19, 2009 at 07:34 AM