Bank of America reports $1.2bn loss
- 21 January 2011
- From the section Business
Bank of America has reported a second straight quarterly loss, driven by a $2bn (£1.25bn) writedown of its mortgage business.
The bank announced a net loss of $1.2bn in the last three months of 2010, compared with a $5.2bn loss a year ago.
However, last year's results included a $4bn charge related to the government's Troubled Asset Relief Program (Tarp).
Chief executive Brian Moynihan said 2010 was a "necessary repair and rebuilding year".
"Our results reflect the progress we are making at putting legacy - primarily mortgage-related - issues behind us," he said.
The bank had previously warned that it would write down the value of its mortgage business, given the foreclosure crisis in the US, which has seen homeowners - facing high unemployment and slow job growth - fall behind on their mortgage payments.
Excluding the writedown the bank made a $756m profit.
The charge in the fourth quarter was not the only one the bank had to make last year.
The group's third-quarter results also included a hefty $10bn writedown of its cards business.
For the whole of 2010, writedowns totalled $12.4bn, leaving the bank with a net loss of $2.2bn for the year.
"Clearly, the headline number disappoints," said Gary Townsend, president of Hill-Townsend Capital, but he added, "I think the mortgage putback aspect is very manageable."