Embattled BofA takes fourth-quarter beating

Bank of America Corp. suffered its first quarterly loss in 17 years due to escalating credit costs, write-downs of $10.47 billion and trading losses in its capital markets businesses.
JAN 16, 2009
By  Bloomberg
Bank of America Corp. suffered its first quarterly loss in 17 years due to escalating credit costs, write-downs of $10.47 billion and trading losses in its capital markets businesses. The Charlotte, N.C.-based bank’s fourth-quarter loss of $2.39 billion, or 48 cents a share, compares with a profit of $215 million, or 5 cents a share, a year earlier. Assets under management at the end of the fourth quarter were $525 million, down 18% from the end of 2007. The banking giant’s capital markets and advisory-services business recorded a loss of $4.95 billion, compared with a loss of $3.39 billion a year earlier. The early earnings announcement, originally scheduled for Jan. 20, came on the same day that that the Department of the Treasury and Federal Deposit Insurance Corp. said that the government will invest $20 billion into BofA through a purchase of preferred shares (InvestmentNews, Jan. 16). BofA’s results include figures factored in by its July 1 purchase of Calabasas, Calif.-based Countrywide Financial Corp., but not its acquisition of Merrill Lynch & Co. Inc. of New York., as that didn’t close until Jan. 1 Merrill Lynch’s preliminary results indicate a fourth-quarter loss of $15.31 billion, or $9.62 a diluted share, due to the market’s weakness, BofA said in its earnings report, which it released this morning.

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