BoA Writes Down $5.28B; 4Q Net Income Drops 95%

Writedowns had been estimated at $3B
By Jonas Oransky,  Newser Staff
Posted Jan 22, 2008 9:30 AM CST
In a photo provided by Bank of America, Bank of America Chief Executive Officer Kenneth D. Lewis, left, and Los Angeles Mayor Antonio Villaraigosa share a light moment during an announcement of a $1 million...   (Associated Press)
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(Newser) – Bank of America said today its net income plummeted 95% in the fourth quarter, and it wrote down $5.28 billion in collateralized debt obligation. Net income for the largest retail bank and credit-card issuer was $268 million, or 5 cents per share, compared to $5.26 billion, or $1.16 a share, last year. The company had previously estimated write-downs in excess of $3 billion, the Wall Street Journal reports.

Said the CEO, “Our fourth-quarter results were severely impacted by ongoing dislocations in capital markets and the slowing economy.” Separately, the bank had $400 million in losses to support specific cash funds and wrote down $400 million on relevant securities. Net revenue plunged 31% and return on equity fell from 15.76% to 0.6%.