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Bank of America profits dive 41%
21.07.08
Bank of America's profits fell 41% in the last quarter as the credit crisis bit heavily into its bottom line.
The bank, which this month merged with stricken mortgage giant Countrywide, tonight more than tripled the amount set aside for loans gone bad due to collapsing property prices and a slowing economy.
However, the dismal figures were not as bad as Wall Street analysts predicted. Citigroup, JPMorgan and Wells Fargo also beat forecasts, giving rise to some hope that the credit crunch is not as bad as the pessimists think. Bank of America shares jumped 10% as it said profits for the second quarter fell to $3.41 billion from $5.76 billion last time.
Those results excluded the $2.33 billion of losses racked up by Countrywide during the period. Countrywide's dismal figures included about $3.7 billion of credit related losses and writedowns.
Bank of America set aside $5.8 billion for duff loans, up from the $1.8 billion booked a year earlier.
