Bank of America profits drop 77%

by Richard Kilner

Story link: Bank of America profits drop 77%

Yesterday the Bank of America declared losses in quarterly profit of 77%, and forecasts substantial further losses on consumer loans.

The news sent shares falling by 2.5% to $37.61.

It is the third consecutive quarter which has seen the bank record a loss.

The Bank of America is heavily involved in consumer banking, a factor which could prove detrimental to its performance as the economic conditions within America continue to worsen.

The US housing market is still weak, and that factor coupled with the tightened credit markets are making life difficult for many banks.

The bank has now set aside $6bn to cover bad loans, an increase from the $1.2bn previously set aside and an indicator of how seriously the problems are being taken.

However, it is expected that the difficult times for banks in the US and elsewhere are set to continue.