Bank Of America’s Earnings Drop 68%, Cuts Dividend

New York London GMT Tokyo Singapore

Bank Of America’s Earnings Drop 68%, Cuts Dividend

By David Spurr on October 7, 2008 | More Posts By David Spurr | Author's Website

Today was one of the wildest days that I can remember. After the close, Bank Of America (BAC) came out and cut their dividend in half. They also saw their net income drop 68%. The stock was off sharply in after hours trading (see chart below)…trading around 29.00 level.

They’re facing prospects of additional write-offs. Lewis stated that this is one of the toughest banking environments he’s witnessed in his lifetime.

“These are the most difficult times for financial institutions that I have experienced in my 39 years in banking,” said Chairman and Chief Executive Kenneth D. Lewis. He added that the company believes it’s “prudent” to raise capital as market conditions have changed “significantly” in the past two months.
Credit-loss provisions soared to $6.45 billion from $2.03 billion a year ago and $5.83 billion in the second quarter. The Charlotte, N.C., company said the economy has moved to a recessionary environment, adding the risk of a “prolonged recession” has increased.
Net charge-offs, or loans the company doesn’t think are collectable, jumped to 1.84% from 0.80% of total average loans and leases a year ago and 1.67% in the second quarter, reflecting housing market deterioration and slowing economic conditions. Nonperforming assets surged to 1.42% from 0.43% a year ago and 1.13% in the second quarter.

Check Out These Related Posts:

If you like this article please...

Subscribe by RSS Subscribe by Email

Email This Post To A Friend

Recent News:

*Spain October Producer Prices Flat On Month Vs. 0.4% Drop In September - 2 mins ago
French Manufacturing Confidence Stable In November - 4 mins ago
*Spain October Producer Prices Down 4.2% On Year Vs. 5.4% Fall In September - 5 mins ago
*Singapore January-October Visitor Arrivals Drop 6.9% On Year - 11 mins ago
*France Oct. Consumer Spending Up 3.5% On Year, Consensus 2.3% - 17 mins ago

Opinions From Our Contributors

Commodities Silver ETFs: More Gains To Come? Oil Seems Like It’s Going Nowhere… But The Story Is Very Different Below The Surface Distorted IEA Oil Reserve Figures Create Biofuel Opportunities In “White Gold” Region Of Central Asia The Simplest Reason Gold Will Soar Physical Gold, Silver And Oil Out-Performing Their Stocks? Silver Hits New Highs At Top Of Uptrend Channel Gold Has Just Barely Entered The Gravity-Free Zone More Than Just Mines: A Look At Other Ways To Profit From Coal, Copper And Ore China Owns The Heavy Stone Has Gold Just Broken Out Of Its Trend Channel? Read More »	Financials Don’t Count Out Actively Managed ETFs U.S. Bank Failures Reach 124 Financial ETFs Still Remain Vulnerable Ron Paul Thinks That Fed “Oversight Is Laughable” Buffett Borrows For Rail Acquisition Investment Ideas: Here Are 3 Dirt Cheap Stocks Treasury To Auction TARP Warrants Dear Reader, We Cannot Criticize Goldman Sachs. Instead, We Admire It 2010 Outlook For The US Banking Industry Get Rid Of Your General Electric Shares Read More »	Exchange Traded Funds Protect Yourself Against An Imminent Stock Market Correction Japan ETFs: The New War They’re Waging India ETFs: Too Much, Too Soon? ETF Update: Health Stocks And Health Care Legislation Biggest Gainer ETFs For The Week Ended 22 Nov What You Should Know About Precious Metals ETFs And Taxes Main Street Vs. Wall Street: Using ETFs To Capitalize Why You Should Watch This Leisure & Entertainment ETF Biotech Investing: Spread Your Risks With ETFs The Forgotten Commodity - Rice Read More »
Stocks Insider Selling Can Be An Important Tool In Determining Potential Trouble For Both Individual Stocks And The Broader Market Stock Picks For Tuesday: Curis, THQ And DryShips Buy Microsoft Stock As It Transits Into The Cloud-Computing Revolution Chart Of The Week: No More Easy Money For Volatility Sellers? 2009 Best Small Companies Part 3 Why Is Pimco’s Bill Gross Investing In Utilities? Morning Movers: LDK Solar, Origin Agritec, USG Stocks To Watch On Monday Thanksgiving Week: Stock Trading Tends To Be Less Bullish Stock Market News: Ebay Website Outage; Microsoft In Discussions With News Corp. To “De-index” Firm’s News Websites From Google Read More »	Forex EUR/USD Lower In Asia Trading Forex Trading Ideas: Is Sterling About To Get Pounded? AUD/USD Loses Momentum After Testing The 200-Hour Moving Average Fed Comments Revive Risk Appetite, Sending US Dollar Lower Structural US Dollar Weakness Persists Australian Dollar: Caution Canadian Dollar: Caution Forex Traders Await Tuesday’s German IFO Report Better Existing Home Data Leads To Some US Dollar Buying Swiss Franc: The Downside Prevails Read More »	Economy Government Debt - The New Subprime? Heeding The Populist Call Here’s A Sector To Short Cartoon: This Unemployment Line Seems Different 29 Retailers You’ll Have A Harder Time Finding After 2009 Emerging Markets Consider Capital Controls To Combat “Hot Money” Inflows Despite Recession, Innovation Is Alive And Well What Is Ron Paul’s Real Agenda When He Talks About Auditing The Fed China: A Riddle Wrapped In An Enigma Should A House Be Treated As A Great Investment? Read More »