BOA posts 2.2 Billion Dollar Loss
Posted October 16, 2009on:
The United States’ largest bank, Bank Of America posted a 2.2 billion dollar loss in its third quarter report released Friday, October 15th. Bank of America suffered immense losses because of the rising number of Americans who are defaulting on their credit card and mortgage bills. Bank of America officials released a report saying they paid 1.2 billion dollars in dividends to their preferred shareholders. They struck a deal with the government to release quarterly payments in return for accepting the 45 billion dollar bailout money from the financial package. This is amid the recent announced resignation of Bank of America CEO Ken Lewis after many controversial decisions including the buyout of financial firm Merrill-Lynch. On the 14th, CEO Lewis had signed an agreement not to accept any bonuses or salary for his final year of work because of the heavy scrutiny he was under. Overall, shares fell 26 cents even though Wall Street and financial analysts predicted a 21 cent drop per share. Reasons for the downturn in the financial firm include the credit card and mortgage divisions which both posted 1 billion dollar losses. Bank of America also posted 11.7 billion dollars worth of bad loans this quarter. They are in a very dire situation and I am waiting to see what they will do next to try and get out of this mess.