Bank Of America: 3rd Straight Profit Decline
Bank of America, the largest U.S. retail bank, suffered a 3rd straight quarterly profit decline,
posting a 77% percent decline for Q1 $1.21 billion vs $5.26 billion; earnings included a $776 million pretax gain linked to the sale of shares in Visa.
Net revenue -6%; Bad loan reserves quintupled to $6.01 billion;
Net charge-offs nearly doubled to $2.72 billion and nonperforming assets nearly quadrupled to $7.83 billion.
Late payments in the bank's $81 billion credit-card portfolio reached 5.8%. About 44% of Bank of America's $110 billion in home-equity loans are in California,
Moody's Investors Service downgraded Bank of America debt to "Aa2" from "Aa1" and assigned a "negative" outlook.
It cited the bank's "relatively weak capital position" and risks tied to Countrywide, mortgage and home equity exposure, and CDOs.
CEO Kenneth Lewis:
"We remain concerned about the health of the consumer given the prolonged housing slump, subprime issues, employment levels and higher fuel and food prices.
It would be too early to strike up the band and sing 'Happy Days Are Here Again,"
posting a 77% percent decline for Q1 $1.21 billion vs $5.26 billion; earnings included a $776 million pretax gain linked to the sale of shares in Visa.
Net revenue -6%; Bad loan reserves quintupled to $6.01 billion;
Net charge-offs nearly doubled to $2.72 billion and nonperforming assets nearly quadrupled to $7.83 billion.
Late payments in the bank's $81 billion credit-card portfolio reached 5.8%. About 44% of Bank of America's $110 billion in home-equity loans are in California,
Moody's Investors Service downgraded Bank of America debt to "Aa2" from "Aa1" and assigned a "negative" outlook.
It cited the bank's "relatively weak capital position" and risks tied to Countrywide, mortgage and home equity exposure, and CDOs.
CEO Kenneth Lewis:
"We remain concerned about the health of the consumer given the prolonged housing slump, subprime issues, employment levels and higher fuel and food prices.
It would be too early to strike up the band and sing 'Happy Days Are Here Again,"
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