Bank of America posts net loss of $1 billion
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