Thread: BANK OF AMERICA 3RD QTR PROFIT FALLS 32%

Bank of America 3Q Profit Falls 32 Pct.

By IEVA M. AUGSTUMS

Thursday, October 18, 2007

CHARLOTTE, N.C. - Bank of America Corp.'s plunging profits shocked Wall Street Thursday and prompted a clearly frustrated chief executive Kenneth Lewis to say that changes loom in its investment banking business.

"I've had all of the fun I can stand in investment banking at the moment," said Lewis, who heads up the nation's second largest bank. "So to get bigger in it is not something I really want to do."

As the last of the nation's top three banks to report results this week, Bank of America's news suggests that the problems in the credit market may yet be closer to the beginning than an end. But while Lewis blamed some of his bank's problems on those market conditions, he admitted his traders also made plenty of mistakes.


"What I can't say is that we'll stay the course," Lewis said on a call with analysts, after his company posted a 32 percent profit drop in the third quarter. "The probability of changes and eliminations of some businesses and infrastructure ... is very high."

Bank of America's shares fell $1.18 to $48.85 Thursday, after the Charlotte-based bank said net income declined to $3.7 billion, or 82 cents per share from $5.42 billion, or $1.18 per share, a year ago. The bank's revenue fell 12 percent to $16.3 billion.

Analysts expected earnings of $1.06 per share on revenue of $18.3 billion, according to a poll by Thomson Financial. The earnings estimates typically exclude one-time items.

The very idea of a retrenchment is anathema at Bank of America, a growth obsessed company built first under previous chief executive Hugh McColl Jr., and since 2001 under Lewis, into a retail banking behemoth.

In 2004, the bank acquired FleetBoston Financial. A year ago it purchased credit card issuer MBNA Corp.

In July, the bank completed its purchase of wealth management company U.S. Trust Corp. and earlier this month it took over LaSalle Bank Corp. to expand its presence in Chicago.

Internally, Bank of America has spent heavily in recent years to build out an investment banking group, but it still much smaller than Wall Street peers.

The unit's quarterly earnings fell by $1.33 billion, or 93 percent, and revenue fell 44 percent from a year ago as sales and trading-revenue declined. The bank wrote down $247 million for leveraged loans and other financing commitments, and suffered a $607 million trading loss.

Lori Appelbaum, a Goldman Sachs analyst, said the trading hits "were significant and also worse than peers."

"While it is logical for the bank to downsize its investment banking platform on the heels of such a disappointing trading performance, this comes after significant investments in the business over the years of about $600-700 million," Appelbaum wrote in a research note.

Lewis said the analysis of the unit will become "more clear" in the weeks ahead and that changes could be announced as early as later this year.

Bank of America, considered a bellwether for the banking industry because it has branches across the country, said "significant dislocations" in the capital markets also led it profits to fall.

In its largest consumer unit, which includes America's biggest credit-card business and bank-branch network, net income dropped 16 percent to $2.45 billion. Earnings were hurt by higher managed credit costs. The bank set aside $2.03 billion for credit losses, up more than 73 percent from $1.17 billion a year earlier.

Still, there was some good news.

Friedman, Billings, Ramsey & Co. analyst Gary Townsend said the bank's expense controls are solid and a slight expansion in net interest margin is a positive trend.

The bank's net interest margin improved to 2.61 percent from 2.59 percent, helping boost net interest income to $8.62 billion.

Also, wealth-management revenue increased 24 percent to $2.2 billion, as profits grew 17 percent to $599 million amid the bank's acquisition of U.S. Trust.

Bank of America joined New York's Citigroup Inc. and JPMorgan Chase & Co., among other banks, in reporting losses this week related to leveraged loans, mortgages, consumer credit, or a combination.

Washington Mutual's shares fell nearly 8 percent Thursday a day after it posted a third-quarter profit drop 72 percent, hurt by fallout from the housing slump.

By contrast, The Bank of New York Mellon Corp. posted an 82 percent rise in profit Thursday as market volatility brought in more fees from securities servicing. Its shares rose 4.2 percent.

For the first nine months of the year, Bank of America's net income was $14.7 billion, or $3.25 a share, down from $15.88 billion, or $3.44 a share in 2006. Revenue was $53.65 billion, down from $54.1 billion in 2006.

Meanwhile, Capital One Financial Corp. posted a third-quarter net loss Thursday, hurt by charges from shutting down its GreenPoint Mortgage business.

The credit card issuer, which continues to expand into retail banking, said its net loss totaled $81.6 million, or 21 cents per share, compared with profit of $587.8 million, or $1.89 per share, a year earlier.

A service of the Associated Press(AP)

http://www.nctimes.com/articles/2007/10 ... bucuo0.txt

What goes around comes around.

Like those illegal alien customers now?

Dixie

Karma is a real biiiatch.

Karma is a real biiiatch.

hahahahahahaha ... nothing more fun than kicking a bad bad banker when he is down on his luck

Well... maybe a bad bad Lawyer... like The ACLU... now that would be a blast to watch both file backruptcy

The Soup Nazy says "NO Soup for You"

I love it! Wonder how many of their cherished illegal card holders have
already defaulted?

Wonder if any of them at the top have thought back a few months.....
could it be something they did? :P

HA!!!!! THATS WHAT THEY GET. THEY ARE LOSING ALL THOSE ILLEGALS THEY WERE KISSING UP TO. AND MANY PATRIOTS PULLED OUT OF ACCOUNTS THERE AS WELL.

HE HE. LIFE IS SO SWEET.

One does get what one deserves, does this mean they will sever Countrywides umbilical cord?

"The credit card issuer, which continues to expand into retail banking, said its net loss totaled $81.6 million,"

Awwwwwwwwwwwww...........they need another couple million ILLEGALS sucking some more blood out of the bank!

Hope their shareholders are putting 2 and 2 together.

added to the homepage

http://www.alipac.us/article-2669-thread-1-0.html


Everyone, please remember to visit www.bankofamericaboycott.com


W

Well, my accounts were closed about six or seven months ago (that I can confirm). Now, after being hired for a government job, you'll never believe what the U.S. Government is using for their travel cards??? BOA "government" cards. I almost lost my job when I refused to fill out the credit application and take their training. I was told that either I would lose my job, be counselled, or be lowered in grade. OK, I eventually succumbed to the threats, but I use my own credit card (hehe). They (my Supervisors) hate me, and I got around the policy. As long as I keep the funds from going through BOA, I am happy.