Bank of America today reported a whopping 32% drop in third-quarter net income, thanks to steep trading losses, write-downs to cover loan defaults, and larger set-asides to cover credit losses. Unlike many competitors, the nation's second-largest bank hadn’t issued loss guidance.
The bank posted $607 million in trading losses, $247 million in write-downs, and $2.03 billion in reserves to cover credit losses, compared to $1.17 billion a year earlier, the Wall Street Journal reports. The next couple of quarters will be messy for Bank of America,'' an analyst told Bloomberg. You are only seeing the beginning. The banks will be putting up a lot of money for reserves.''