Bank of America falls to loss in third quarter
2012-10-17 17:16:05
Bank of America racked up a loss of $33 million in the third quarter after recognizing diminished credit quality that was papered over in accounting gymnastics a year earlier.
The US banking giant said Wednesday that net earnings dropped from $5.9 billion a year earlier after taking a $1.9 billion cost for "debit valuation adjustments" that reset valuations for credit quality.
It also scored $1.6 billion in litigation charges in the third quarter, which, together with other costs, wiped out operating profits.
Total revenues fell to $20.6 billion from $28.7 billion a year earlier. The bank cut in half its quarterly set-asides for credit losses, to $1.8 billion.
But it said its capital base was stronger, with tier one capital at 11.4 percent, and that business was growing strongly, with its mortgage business rising 13 percent from the second quarter.
Earnings per share was $0.00, compared to 56 cents a year earlier.
"Our strategy is taking hold even as we work through a challenging economy and continue to clean up legacy issues," chief executive Brian Moynihan said.