Bank of America Corp., the biggest US lender, said second-quarter profit declined and the company set aside more money for losses as chief executive officer Kenneth Lewis predicted the weak economy will persist into 2010.
Net income fell 5.5% to $3.22 billion, or 33 cents per diluted share, from $3.41 billion, or 72 cents, a year earlier, the Charlotte, North Carolina-based bank said on Friday in a statement. The average estimate of 21 analysts surveyed by Bloomberg was 18 cents a share.
Bank of America?s report follows better-than-expected results from JPMorgan Chase & Co and Goldman Sachs Group Inc earlier this week. While competitors have repaid US rescue funds and freed themselves of extra US scrutiny, Lewis must repair relations with regulators after clashes over the bank?s pursuit of Merrill Lynch & Co and demands that he raise $33.9 billion in capital.
?Difficult challenges lie ahead from continued weakness in the global economy, rising unemployment and deteriorating credit quality that will affect our performance for the rest of the year and into 2010,? Lewis said. ?We are convinced that Bank of America will weather the storm.?
Profit in global banking increased 74 percent to $2.49 billion, aided by a $3.8 billion pretax gain from selling the company?s merchant processing business. The home loan and insurance unit lost $725 million on higher credit costs and expenses to help homeowners modify their loans.
Earnings in global markets, the unit that includes trading of bonds, equities and currencies, more than quadrupled to $1.38 billion on improved credit markets.
Bloomberg
CIT turns to lenders after US refuses bailout
CIT Group Inc, the 101-year-old commercial finance company facing bankruptcy, said it?s in talks with potential lenders after failing to receive federal guarantees for its bonds.
The company, which finances about 1 million businesses from Dunkin? Brands Inc to Eddie Bauer Holdings Inc, is ?continuing to evaluate alternatives,? New York-based CIT said on Thursday in a statement. Earlier, bondholders held calls to discuss whether to swap some claims for equity to reduce indebtedness, according to a person familiar with the situation.
CIT is running short of cash, and may need as much as $6 billion to avoid filing for bankruptcy protection after the US wouldn?t give the firm a second bailout, according to CreditSights Inc. CIT, which has reported $3 billion of losses in the last eight quarters, received $2.33 billion in funds from the US treasury in December and hasn?t been given access to the Federal Deposit Insurance Corp?s debt-guarantee programme
Bloomberg