Bank of America Loses $2.2B as Loans Sour

Investment revenues up, but consumers default on nearly $10B
By Newser Editors and Wire Services
Posted Oct 16, 2009 8:02 AM CDT
In this photo made Wednesday, Sept. 30, 2009, a branch office of Bank of America is shown in New York.   (Mark Lennihan)
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(Newser) – Bank of America Corp. lost more $2.24 billion in the third quarter, the company announced today, as loan losses kept rising. Those losses amounted to nearly $10 billion, providing further evidence that consumers are still struggling to pay their bills. The bank also added $2.1 billion to its reserves to cover bad loans, bringing its total reserves to $11.7 billion. The 26 cents-per-share loss was 5 cents worse than analysts expected.

Bank of America's results were aided by profit from investment bank Merrill Lynch, including income from bond, stock and currency trading. The banks total revenue actually increased 33% to $26.04 billion. Its earnings follow the pattern set this week by Citigroup Inc. and JPMorgan Chase & Co., which also reported more loan losses during the third quarter, though JP Morgan and Goldman Sachs managed big profits anyway thanks to trading operation gains.