BANK OF AMERICA IN BIG FINANCIAL TROUBLE
Bank of America had its latest slow down on Friday, a huge loss as growing numbers of Americans defaulted on their mortgages and credit cards.
The nation’s largest bank lost close to $2.2 billion in the third quarter, after getting hit with a number of costs associated with the government’s progress to save the firm over the past twelve months.
The North Carolina based lender said it paid $1.2 billion on its preferred shares, held primarily by the government. The company settled to make periodical payments in exchange for getting $45 billion in government bailout money.
Bank of America also paid $402 million during the quarter to end an agreement it had met with the government in January. This was intended to protect the corporation from more losses. Resulting Friday’s results were slightly worse than Wall Street was expecting. Bank of America reported it lost 26 cents a share. Experts had expected that the business would undergo a failure of 21 cents a share. Bank of America's finance and credit card department has seen the major losses of this quarter.
All divisions suffered more than $1 billion losses during the summer time, as countless Americans struggled to pay their loans payments, mostly due to the lose of jobs. Bank of America also faced huge loan troubles within commercial real estate, due to slower spending by consumers and businesses. In fact, credit costs still remain elevated.
The one highlight was in the status of wealth management business, one of the most important aspects that led Bank of America to complete its notorious deal with Merrill Lynch the year before. All revenues and proceeds inside the division were doubled from the previous year's rankings. No doubt that Bank of America’s latest fallout comes at a most difficult point for the countries largest bank. Currently Bank of America is facing a number of extensive state and federal investigations due to its buying of Merrill Lynch.
The Obama administration is also reviewing the company’s pay plans for its top one hundred employees. On Thursday, an important decision by CEO (Lewis), was to not accept a bonus of salary in his final term as CEO. This strtegy is speculated as a scapegoat from media disproval.
By: Brian Greene |
Release Date: October 15, 2009 |
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