Bank of America reports $1bn loss

Bank of America has reported a $1bn (£612m) net loss for the three months from July to September, which was worse than had been expected.

The figure compares with a net profit of $3.2bn in the previous quarter and $1.2bn in the same period of last year.

But the bank's boss Kenneth Lewis said he was "heartened by early positive signs", referring to the levelling-off of bad debts from its credit cards.

Bank of America is the fourth major US bank to report third-quarter results.

I don't think it looks as bad as the market is painting it out to be Weston Boone, Stifel Nicolaus Capital Markets Check Bank of America's shares

It was announced on Wednesday that Mr Lewis, who is retiring as chief executive at the end of the year, would not receive any pay or bonus for 2009.

He said in the results statement that the figures had been hit by a number of "non-core items" and that "excluding those items, our revenue continued to hold up well".

The report said that although the rate of debts going bad was slowing, "credit costs remained high as most economies around the world remained weak".

Bank of America set aside $11.7bn to cover credit losses, which was down from $13.4bn in the previous quarter but up from $6.5bn in the same period last year.

Mortgage losses

The credit card business by itself reported a net loss of $1bn.

The net loss on mortgages and insurance widened to $1.6bn from $54m in the same period last year.

But there was a stronger performance from its global markets division, which was inflated by the acquisition of Merrill Lynch.

Net income from global markets came in at $2.2bn, compared with a loss of $588m in the same period last year.

Shares in Bank of America ended Friday down more than 4%, contributing to the main Dow Jones index losing 0.7%.

"I don't think it looks as bad as the market is painting it out to be," said Weston Boone at Stifel Nicolaus Capital Markets in Baltimore.

"Their provisioning is down $1.7bn, and they're making comments about levelling in card delinquencies."

Unfavourable comparisons

Bank of America's results followed better-than expected results from other US banking giants.

On Thursday, Goldman Sachs announced profits for the period of $3.19bn, a four-fold increase from the same period in 2008, while Citigroup reported profits of $101m.

Earlier in the week, JP Morgan revealed net profits of $3.6bn.