By Ieva M. Augstums, AP Business Writer
CHARLOTTE, N.C. (AP) -- Bank of America Corp., the nation's second-largest bank, said Thursday its profit fell 32 percent in the third quarter as trading losses and write-downs on a wide variety of loans offset solid revenue growth in most businesses.
Net income declined to $3.7 billion, or 82 cents per share, in the three months ended Sept. 30 from $5.42 billion, or $1.18 per share, a year ago.
The Charlotte-based bank's revenue fell 12 percent to $16.3 billion from $18.49 billion last year.
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.
Its shares fell $1.63, or 3.3 percent, to $48.40 in premarket trading.
Earnings from its global corporate and investment bank fell by $1.33 billion, or 93 percent, as a result of the disruption in the financial markets during the quarter.
Its expense provision for the unit increased $865 million due to consumer and small business credit costs rising from post bankruptcy reform lows, growth and seasoning in various portfolios and stress in several portfolios driven by the weakened U.S. housing market.
"While the significant dislocations in the capital markets have hurt most participants, we are still very disappointed in our third-quarter performance," Chairman and Chief Executive Kenneth D. Lewis said in a statement. Nonetheless, he added "the majority of our businesses experienced solid revenue growth as sales momentum continued, demonstrating the value of our diverse business mix."
In the bank's largest consumer unit, which includes America's biggest credit-card business and bank-branch network, net income dropped 16 percent to $2.45 billion. Bank of America became the biggest U.S. credit card lender when it bough MBNA Corp. last year. Earnings were hurt this quarter by higher managed credit costs, the bank said.
Wealth-management revenue increased 24 percent to $2.2 billion, as profits grew 17 percent to $599 million. The business was aided by the company's $3.3 billion acquisition of U.S. Trust from Charles Schwab Corp. earlier this year, which contributed about 10 percent to revenue and 5 percent to net income.
Investment banking revenue fell 44 percent from a year ago as sales and trading-revenue declined.
For the first nine months of the year, 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.
Net income declined to $3.7 billion, or 82 cents per share, in the three months ended Sept. 30 from $5.42 billion, or $1.18 per share, a year ago.
The Charlotte-based bank's revenue fell 12 percent to $16.3 billion from $18.49 billion last year.
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.
Its shares fell $1.63, or 3.3 percent, to $48.40 in premarket trading.
Earnings from its global corporate and investment bank fell by $1.33 billion, or 93 percent, as a result of the disruption in the financial markets during the quarter.
Its expense provision for the unit increased $865 million due to consumer and small business credit costs rising from post bankruptcy reform lows, growth and seasoning in various portfolios and stress in several portfolios driven by the weakened U.S. housing market.
"While the significant dislocations in the capital markets have hurt most participants, we are still very disappointed in our third-quarter performance," Chairman and Chief Executive Kenneth D. Lewis said in a statement. Nonetheless, he added "the majority of our businesses experienced solid revenue growth as sales momentum continued, demonstrating the value of our diverse business mix."
In the bank's largest consumer unit, which includes America's biggest credit-card business and bank-branch network, net income dropped 16 percent to $2.45 billion. Bank of America became the biggest U.S. credit card lender when it bough MBNA Corp. last year. Earnings were hurt this quarter by higher managed credit costs, the bank said.
Wealth-management revenue increased 24 percent to $2.2 billion, as profits grew 17 percent to $599 million. The business was aided by the company's $3.3 billion acquisition of U.S. Trust from Charles Schwab Corp. earlier this year, which contributed about 10 percent to revenue and 5 percent to net income.
Investment banking revenue fell 44 percent from a year ago as sales and trading-revenue declined.
For the first nine months of the year, 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.
Bank of America Corp.: http://www.bankofamerica.com