Bank of America Corp. said Wednesday it lost $5.2 billion during the final three months of 2009 as consumers struggled to make their mortgage and credit card payments and the bank repaid its government bailout money.
Bank of America said its loss, which reflected payment of preferred dividends, compared with a loss of $2.4 billion a year earlier. The bank said its results were boosted by strong results from its Merrill Lynch investment banking operations.
Bank of America, among the hardest hit financial companies during the credit crisis and recession, set aside $10.1 billion during the fourth quarter to cover soured loans, down nearly 14 percent from the previous quarter. But it also reported big losses in its mortgage and credit card businesses.
The Charlotte, N.C.-based bank lost 60 cents per share, more than the 52 cents analysts were expecting, according to Thomson Reuters.
Bank of America said its global wealth and investment management unit saw its net income rise to $2.5 billion in the quarter, up from $1.4 billion a year earlier, driven by the addition of Merrill Lynch.
The bank's results followed the pattern of JPMorgan Chase & Co. and Citigroup Inc., which reported continuing losses for their lending operations during the fourth quarter. The losses are raising concerns about the impact of credit problems on the economic recovery.
JPMorgan Chase, which reported a $3.28 billion profit, also said its investment banking earnings offset loan losses. Many analysts predict loan losses should peak some time in the first half of 2010.
On Tuesday, Citigroup Inc. said it lost $7.58 billion in the fourth quarter as consumers continued to struggle to repay loans and the bank repaid its government bailout. The bank said it set aside $8.18 billion to cover bad loans during the most recent quarter.
Bank of America said $4 billion of its loss came from the costs of paying back $45 billion in government bailout money in December.
The bank's new CEO Brian Moynihan has said Bank of America's decision to pay back the government loans was a major step in bringing back employee and shareholder confidence. It also freed the bank from restrictions on how much it could pay employees.
Moynihan, 50, became CEO of the bank on the first day of 2010, after Ken Lewis retired.
For the full year, Bank of America lost $2.2 billion, or 29 cents per share. It earned $2.56 billion, or 54 cents per share in 2008.
The bank's stock was up 16 cents at $16.48 in pre-opening trading.
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