Bank of America has announced that it made third-quarter losses of more than $2.2bn, due in part to continued losses from consumer loans.
The bank, which is the second largest in the US, said on Friday that the losses – which account for preferred dividends of $1.24bn – amount to 26 cents per share, worse than predictions by analysts.
The company wrote down loans by almost $10bn during the July-September period – a rise of almost $1bn from the previous quarter.
The bank, which has received $45bn in funding as part of the US treasury's $700bn financial stimulus package, also added $2.1bn to its reserves to cover bad loans.
The company's provision for credit losses now stands at $11.7bn.
Further losses expected
Ken Lewis, chief executive officer of Bank of America, said that loan losses were likely to continue rising.
"Based on [the] economic scenario, results in the fourth quarter are expected to continue to be challenging as we close the year," Lewis said during a conference call with analysts.
The third-quarter losses compared with earnings of $704m, or 15 cents per share, a year earlier. Revenue in the quarter increased 33 per cent to $26.04bn.
"Obviously, credit costs remain high, and that is our major financial challenge going forward," Lewis said in a statement accompanying the earnings report.
"However, we are heartened by early positive signs, such as the levelling of delinquencies among our credit card numbers."
Bank of America is considered by analysts to be particularly vulnerable amid rising US unemployment. The US jobless rate rose last month to 9.8 per cent.
The bank has about 53 million consumer and small business customers, meaning that it is exposed to payment defaults in the present economic climate.
The results come after Citigroup Inc and JPMorgan Chase also reported loan losses during the third quarter of 2009, as customers struggled to pay their credit card and mortgage debts.
General Electric also reported on Friday that its GECapital business, which includes credit cards, saw an 87 per cent drop in profits.
News Americas / Bank of America reports losses
Bank of America has announced that it made third-quarter losses of more than $2.2bn, due in part to continued losses from consumer loans.
The bank, which is the second largest in the US, said on Friday that the losses – which account for preferred dividends of $1.24bn – amount to 26 cents per share, worse than predictions by analysts.
The company wrote down loans by almost $10bn during the July-September period – a rise of almost $1bn from the previous quarter.
The bank, which has received $45bn in funding as part of the US treasury's $700bn financial stimulus package, also added $2.1bn to its reserves to cover bad loans.
The company's provision for credit losses now stands at $11.7bn.
Further losses expected
Ken Lewis, chief executive officer of Bank of America, said that loan losses were likely to continue rising.
"Based on [the] economic scenario, results in the fourth quarter are expected to continue to be challenging as we close the year," Lewis said during a conference call with analysts.
The third-quarter losses compared with earnings of $704m, or 15 cents per share, a year earlier. Revenue in the quarter increased 33 per cent to $26.04bn.
"Obviously, credit costs remain high, and that is our major financial challenge going forward," Lewis said in a statement accompanying the earnings report.
"However, we are heartened by early positive signs, such as the levelling of delinquencies among our credit card numbers."
Bank of America is considered by analysts to be particularly vulnerable amid rising US unemployment. The US jobless rate rose last month to 9.8 per cent.
The bank has about 53 million consumer and small business customers, meaning that it is exposed to payment defaults in the present economic climate.
The results come after Citigroup Inc and JPMorgan Chase also reported loan losses during the third quarter of 2009, as customers struggled to pay their credit card and mortgage debts.
General Electric also reported on Friday that its GECapital business, which includes credit cards, saw an 87 per cent drop in profits.
Sport - Video: A true football hero
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Paralysed and confined to a wheelchair, the Copa Libertadores winner continues to pass on his football knowledge to a new generation of coaches.
Sport - Obama set to be lord of the rings
The four cities bidding for the prize honour of hosting the 2016 Olympic Games have begun three intensive days of lobbying – with the Obama factor looming large ahead of Friday's vote by the International Olympic Committee.
The White House announcement on Monday that President Barack Obama would fly in to Copenhagen to appear before the International Olympic Committee in support of Chicago's bid for the Games was the news the other three candidates least wanted.
Madrid, Rio de Janeiro and Tokyo all fear that the IOC membership could be swayed by Obama's charismatic appeal, as they were four years ago when then British prime minister Tony Blair helped persuade them to choose London over clear favourites Paris for the 2012 Olympics.
Two years later, then-Russian president Vladimir Putin was similarly persuasive when the Black Sea resort of Sochi, rank outsiders, won the right to stage the 2014 Winter Olympics.
Obama, who has close connections with the Windy City, had originally opted to stay at home to deal with his healthcare reform plans and announced that First Lady Michelle Obama would travel instead to the Danish capital.
Chicago bid leaders were delighted by Monday's news which means both Obamas will now be part of the team making the presentation to the IOC membership on Friday.
Business - Japan prices fall at record rate
Consumer prices in Japan tumbled at a record pace in August according to fresh government data, raising fears that a prolonged downward spiral of deflation could undermine the country's fragile economic recovery.
Figures released on Tuesday showed Japan's key core consumer price index (CPI) falling 2.4 per cent from a year earlier, as rising unemployment and falling wages kept domestic demand weak.
The data represents the sixth straight month of declines in the index, and the biggest fall since 1971 when officials first began recording comparable data.
The index excludes volatile fresh food prices and also includes fuel and energy costs.
The falls come despite recent signs of an improvement in the Japanese economy, which returned to positive growth in the second quarter of 2009, after its worst recession since the second world war.
News Europe - UN investigator defends Gaza report
United Nations investigator has defended a report published earlier this month that accuses Israel and Palestinian fighters of war crimes following the Israeli offensive in Gaza earlier this year.
Addressing the UN Human Rights Council in Geneva on Tuesday, Richard Goldstone said a lack of accountability for war crimes committed in the Middle East had reached "crisis point", undermining any hope for peace in the region.
The former South African judge rejected criticism by Israel that the 575-page report was politically motivated.
He said his team was led by a belief in the rule of law, human rights and the need to protect civilians during war.
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