Bank of America has suffered yet again a loss of $1.2 billion. It is the second straight quarterly loss for the Bank. This loss is driven by a $2 billion write-down of its mortgage business. The Bank of America has reported this loss in the last three months of year 2010. The bank suffered a loss of $5.2 billion prior to 2010.
The economic recession has made huge impact on the economy and seems to continue. The economic conditions of businesses, banks, financial institutions have been greatly affected by this sequel of recession. This is not the first time when Bank of America has witnessed such a situation. It has been happening from time to time. However the result for last year also includes a charge that is related to government’s Troubled (–foul word(s) removed–)et Relief Program (TRAP).
The Chief Executive of Bank of America Brian Moynihan said that the previous year was a repair and rebuilding year for the bank. He also said that their results show bank’s progress in establishing the legacy that the bank has left the mortgage related issues behind.
Bank of America had previously cautioned that it would write-down the value of its mortgage business. If the write-down is excluded, then the bank has made a profit of $756 million but the charge of the end was not the only charge that bank had to clear. $10 billion write-down of bank’s cards business is also included in its 3rd quarter results. The total write-downs for 2010 are observed to be $12.4 billion thus leaving the bank with a loss of $2.2 billion.
Bank of America was amongst the banks that suffered a lot from the overall global financial crisis. Bank of America is the biggest U.S bank speaking in terms of (–foul word(s) removed–)ets. The loss per share in 2009 was 29 cents per share but the loss in 2010 is reported to be 37 cents per share. Though the bank made a profit of $6.3 billion somehow in 2009 but it was a severe loss for share holders. The hefty write-down on its home loan business has results in a loss previous year.
Bank of America is the second largest bank when characterized by market capitalization. In terms of total revenue, Bank of America is the 5th largest bank in United States. Since the bank generates ninety percent of the domestic market revenue, it persists to purchase businesses in United States. The Bank of America sees a tough competition from JP Morgan Chase, Citigroup and Wells Fargo. The current situation however is alarming for Bank of America since the repute and the loss factor are amongst the major concerns of the bank.