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| BofA swings into $1 bn loss on higher credit costs |
| Press Trust of India / New York Oct 16, 2009, 18:32 IST |
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Financial services firm Bank of America (BofA) has swung into a third-quarter loss of $1 billion, as the bailed out entity continued to grapple with rising credit costs.
Bank of America which had received $45 billion from the Federal government to tide over the financial crisis had raked in profit of $1.2 billion in same period a year ago.
Under fire from shareholders mainly for the ill-timed buyout of Merrill Lynch, the entity's results might come as a set back on its revival hopes since rivals-- Goldman Sachs and JPMorgan Chase reported encouraging third quarter performance.
In the second quarter, the firm had a profit of $3.2 billion.
"Results were negatively impacted by continued weakness in the US and global economies and stress on the consumer, which continues to result in high credit costs," Bank of America said in a statement today.
Credit losses for the third quarter soared to $11.7 billion as against $6.45 billion in the year-ago period.
Total revenues rose to $ 26.04 billion in the latest quarter as against $19.62 billion in the corresponding period a year ago.
"Earnings in the quarter were affected by $2.6 billion in pretax mark-to-market and credit valuation adjustments on certain liabilities, including the Merrill Lynch structured notes, and a $402 million pre-tax charge to pay the US government to terminate its asset guarantee term sheet," the statement said.
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