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Saturday 17th of October 2009
October 16, 2009    

Bank of America unveils $1bn Q3 loss

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by Kay Murchie
Bank of America unveils $1bn Q3 loss

Bank of America has today unveiled a $1 billion (£612 million) net loss for the third quarter - worse than the market had expected.

The figure compares with a net profit of $3.2 billion in the second quarter and $1.2 billion in the same period a year earlier.

The banking giant is the fourth major US bank to report its quarter three results. JPMorgan Chase was the first US bank to kick-off the reporting season on Wednesday and far exceeded analysts expectations by announcing strong quarter three results.

The bank announced a £2.3 billion profit - outperforming the £330 million income it made in the same period a year ago.

Meanwhile Goldman Sachs yesterday also exceeded expectations and said net earnings for the third quarter were $3.19 billion (£1.96 billion), compared with $845 million in the same period a year ago (prior to the collapse of Lehman Brothers).

However, Citigroup reported a third-quarter net loss to shareholders of $3.2 billion, compared with a loss of $2.9 billion in the same period a year ago.

Returning to Bank of America, the bank did say it was seeing positive signs that credit conditions are picking up.

Meanwhile, outgoing chief executive, Ken Lewis, will not receive any pay this year - a decision ruled by the US Government’s pay tsar.

Sixty-two-year old Lewis announced recently he was to step down at the end of 2009. Lewis, who has worked at the firm for four decades, has faced criticism about his handling of the acquisition of investment bank Merrill Lynch - completed at the start of the year.

Mr Lewis is to pay back around $1 million he has received so far out of a $1.5 million annual salary.

However, he will not have to return his retirement package - understood to be worth tens of millions of dollars.

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