The Banking and Strategy Initiative

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Bank Results Week : BofA reports troubled 2009

BofA is doing well if for the fact that it has already returned all government monies and has provisioned another $1.6 billion for Credit Losses

As a new habit, we will continue to use the NY Times summary ( No it’s not Scott 🙂 )

Even as the nation’s largest financial institutions report whopping profits from their investment banking units, those with major consumer lending portfolios continue to bleed money as unemployment and a weak housing market hamper people’s ability to repay their debts.

On Wednesday, those losses posed a fresh threat to Bank of America, which reported a fourth-quarter net loss of $5.2 billion, or 60 cents a share, compared with a net loss of $2.4 billion, a year earlier. Analysts surveyed by Bloomberg had expected a loss of 52 cents a share.

For the year, the bank lost $2.2 billion or 29 cents a share compared with a profit of $2.6 billion or 54 cents in 2008.

The bank, which acquired Merrill Lynch in 2008 at the height of the crisis, said its total assets soared to $2.4 trillion at the end of 2009 from $1.9 trillion a year earlier.

via BofA losses

The rise in 2009 total assets is good, the fourth quarter loss is just $194 million after TARP payback but overall the card portfolio ( yes, MBNA as we knew it) is by itself $4.9 billion and total write downs have risen to a huge $33 billion from less than half the amount for 2008. Also, BofA and Wells Fargo tomorrow will not have the luxury of international business anymore. However, Wells Fargo is competitive and profit-making. Without HHI, Moynihan would probably continue in a state of suspended thinking and BofA must suffer in 2010 as a result. the ML acquisition is not bringing in ny benefits with top executives walking out and global results affected by well Merrill Lynch.

Bank of America is good at retail banking and even traditional Commercial Banking however, and its trained , much prized employees could still show Wells Fargo a thing or too. In a Press Conference at BofA HQ right now, Moynihan confirmed that only Joe Price’s CFO position is being filled externally as he moves to head Consumer Banking for Moynihan. Moynihan also blamed rash regulation saying Credit Card losses were being exacerbated by about $800m because of the new CARD Act.

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This entry was posted on January 21, 2010 by in Financial Markets, Retail Lifestyle, TARP, Uncategorized, US and tagged , , , , , , , , .

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