BofA's U.S. Operations Lost Money In 2nd Quarter

CHARLOTTE, N.C. — Bank of America Corp.'s reported that its better than expected second-quarter profit was boosted by the bank's foreign operations.

In its quarterly report filed with the Securities and Exchange Commission, the Charlotte, N.C.-based bank said it lost $255 million in the United States, as losses from failed loans continued to rise.

Nearly all the bank's earnings of $2.42 billion after preferred dividends came from Asia, thanks to a $3.5 billion after-tax gain from Bank of America's sale of part of its sake in China Construction Bank Corp. The bank's second-quarter profit totaled $3.22 billion before preferred dividends.

Bank of America's non-U.S. operations generated $3.48 billion profit, including the gain. Its Asia operations brought in nearly $3.58 billion during the quarter, while its Latin America and Caribbean operations made $93 million, and Canadian operations saw a $50 million profit. Operations in Europe, the Middle East and Africa lost $242 million.

The results show the struggles the bank, like others, faces as it tries to build a global business. Bank of America has about 55 million consumer and small business customers, making it vulnerable to delinquencies and defaults, yet also ready to thrive when the economy recovers.

Bank of America said it recorded a $13.4 billion provision for loan losses during the second quarter as consumers struggled with debt amid rising unemployment, compared with $5.8 billion a year ago.

On a conference call with analysts last month, Bank of America CEO Ken Lewis said "profitability in the second half of the year will be much tougher than the first half," given the absence of several one-time items that were positive to earnings including the China Construction Bank stock sale.

The bank has received $45 billion in bailout funds as part of the Treasury Departments $700 billion financial rescue package. It's not known when it will repay the government.

Shares of Bank of America rose 26 cents to end at $16.68 Monday.

Comments

[Sundialsvc4]

Isn't it strange to watch how gullible the financial press can be? As long as, by some arcane sleight of hand and doublespeak, a corporation can say that it "made a profit," this is ample justification to fill what is supposed to be a news piece with sunshine words: e.g. "ready to thrive when the economy recovers."

What is the "truth?" Merely whatever these men want it to be, at the time. Whatever enables them to ... ahh ... "take another trick." (And I'm not exactly talking about the game of bridge here.)

The truth is not in them. And in the real world of finance, banking and insurance (a "real world" which these supposed-businessmen have never ever occupied...) truth actually means everything.

You're being played for suckers. And it's time for this nation of 307 million people to stop playing. To call "securities fraud," and "bribery," by its True Names.

[zombywulf]

IMPORTANT NOTICE!! FOR ANYONE WITH A MORTGAGE WITH TAYLOR,BEAN AND WHITAKER, THEY HAVE GONE BELLYUP AND ARE BEING BOUGHT OUT BY BANK OF AMERICA.
THIS COMES FROM THEIR OWN PHONE HELP. AND IS WHY TB&W WEB SITE IS DOWN.

[lib liberal]

The disconnect between the problems facing main street and Washington keep widening. For the past 6 month's we're nothing but talk of regulation, but zero action. What a joke.

good articles... http://www.iamned.com

[spinns17]

lol watch this ,it will open your eyes
http://video.google.com/videoplay?docid=7065205277695921912

[PhilipTaylor]

Steps toward REFORM of BofA!

1. BofA Lewis should be Dropped along with the Board!

2. BofA should be downsized into pieces and automated into a Internet "Branchless System" that provides low rates and fees through cost effective management. Offer all services through Internet, ATM, or Debit/Credit card.

3. The Merrill piece should become a simple Brokerage House like Schwab or Ameritrade and spun off!

[AnotherMcIntosh]

They can show paper losses any time that they want by simply paying more in bonuses.

It's a shell game.

[nippyfan]

But made it up in overdraft fees. So they are fine.

[nopilikia]

Glad you mentioned that. For a moment I was worried.

[nippyfan]

:-)

[sammcity]

BOA - S*ank of America. The worst bank ever!!! Had a Jeep lease through them some yrs ago. At the end of lease we turned it in on time no money owed. They call us the next week because they lost the vehicle?! We ended up faxing them their own accepance paperwork with their reps signature of possession.

VERY SCARY!

Never again!!!!!

[PhilipTaylor]

Lewis = Allowed $3.9 Billion for Merrill Bonuses. Lewis says it is "a Myth that banks are insolvent according to Generally Accepted Accounting Principles. The vast majority of banks will come through the crisis in great shape." Then why are we BAILING OUT B of A or any other Bank?

http://seekingalpha.com/article/125243-ken-lewis-finally-gets-it-right-3-more-banking-myths-to-add-to-his-6

[Carolab]

Because of BASEL, as you know.

[Carolab]

Gramm-Leach-Bliley established an optional system for investment bank firms to register with the SEC as “Supervised Investment Bank Holding Companies.”

To address the European consolidated supervision deadline, the SEC issued two proposals in 2003, enacted in 2004 as final rules. The “SIBHC Program” established rules under which a company that owned a broker-dealer, but not a bank, could register with the SEC as an investment bank holding company. The “CSE Program” established a new alternative net capital computation method for a qualifying broker-dealer (a “CSE Broker”) if its holding company (a “CSE Holding Company”) elected to become a “Consolidated Supervised Entity.”

Both laid out programs to monitor investment bank holding company market, credit, liquidity, operational and other “risks.” The CSE Program also permitted a CSE Broker to compute its net capital based on Basel Standards.

Ultimately, Bear Stearns Goldman Sachs, Lehman, Merrill Lynch and Morgan Stanley)entered the CSE Program. The SEC was thereby authorized to review the capital structure and risk management procedures of those holding companies. In addition two bank holding companies (Citigroup, JP Morgan) entered the CSE Program.

By permitting CSE Brokers to compute their net capital using Basel Standards, the SEC stated it had expected roughly a 40% reduction in the amount of “haircuts” imposed in computing a CSE Broker’s “net capital” before giving effect to the $5 billion “tentative net capital” early warning requirement added in the final rule.

http://en.wikipedia.org/wiki/Net_capital_rule

[crablover]

Let 'em fail!

[lvdragonlady]

We need to find a way to shut down BofA, WF and citi. They are not doing us any favors, why should we help them out by having an account with them.

[Kiana1]

Absolutely the worst bank in America. They deserve all the worst that could happen to a financial institution. They are not to big to fail.

[eladora]

they were just handed a 25 billion dollar portfolio by the feds. dont believe any of this .

[ZDuck]

I am not supporting banks but the simple fact is if you have a checking account, spend only the money that is in it. If you overdraft, you are in essence getting a loan. Yes the cost is high but that is discourage people. I know people live paycheck to paycheck but you can't just spend more than you have and expect a for-profit business to give it to you for free. If you are hungry, does the store let you buy more milk than you have change for? No and if they did, they'd charge you extra.

[Sundialsvc4]

But here's the rub, ZDuck, and well you know it: the accounting is rigged. The banks take-in the day's transactions and then sort them in the way that is most advantageous to the Bank, not in the way that is most advantageous to you, the account-holder, whose money it supposedly is.

And if you print the transaction-log from your bank's web site every day for a month, you'll actually see the items appear and disappear and rearrange themselves. But there is a common thread that you can very plainly see in every day's outcome: the trap has been set, and opened as wide as possible. I'm a computer programmer by profession, and I know a deliberate algorithm when I see one.

I also took barely-enough law in college to have been taught the terms, "fiduciary duty" and "agent." Ostensibly, a banker is your agent, carrying out your orders to "Pay to the Order Of." And, as your agent, he's supposed to do that "as you, yourself, as a Reasonable Man, would have done." If instead he did things in a way calculated(!) to enrich himself, he would be committing fraud.

And they are.

These crimes have names: "swindling," "usury," "duplicity," "deceit."

"Fraud."

And, oh yeah: "bribery."

[brd893]

They have no problem in taking $135.00 of my paltry $268.00 monthly Citigroup pension or $200+ from my Social Security $1000.00 monthly if I am overdrawn by $1.00 and I am unable to cover it.

They are a bunch of thieves.

[thegrifter]

Down baby Down!
BofA garnishes the Elderly's SS checks in California for overdraft fees. This past by the Cal Supreme Court this year.