CHARLOTTE, N.C. – Bank of America Corp., the biggest U.S. bank by assets, lost $1 billion from July through September as more consumers defaulted on their mortgage and credit card loans, Bloomberg News reported.
The bank on Friday posted a loss of $1 billion, or 26 cents per diluted share, in the third quarter, compared with a profit of $1.18 billion, or 15 cents per share, in the same period a year earlier. Revenue rose 33 percent to $26.04 billion from a year earlier.
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The loss was more than double the average estimate of 24 analysts surveyed by Bloomberg, who forecast a loss of 12 cents a share.
Although Bank of America was boosted by trading revenue from Merrill Lynch, which it bought a year ago, it continued to suffer heavy losses from mortgages and credit cards. The bank also took a $2.6 billion write-down for improvements in credit spreads and a $402 million charge to pay the U.S. government to exit an asset-guarantee program.
“Obviously, credit costs remain high, and that is our major financial challenge going forward,” Kenneth D. Lewis, the bank’s embattled chief executive, said in a statement. “However, we are heartened by early positive signs, such as the leveling of delinquencies among our credit card numbers.”
The bank said it added $2.1 billion to its reserves for loan losses in the third quarter, bringing the total set aside to $11.7 billion, up from $6.5 billion a year earlier.
Bank of America has accepted two bailouts from the federal government since the financial crisis began and owes the U.S. $45 billion. Lewis recently announced he will retire on Dec. 31, and on Thursday he agreed not to accept a salary or a bonus for 2009.
Bank of America’s billion-dollar loss contrasts with the quarterly profits posted earlier in the week by other large banks, including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Citigroup Inc.
