Bank of America still struggling in Q2
BOA’s better than anticipated Q2 profit was energized by the bank’s foreign operations. In its quarterly report filed with the SEC Commission, the bank announced Mon. it lost $255 million in the US, as losses from failed loans continued to rise. Nearly all of the bank’s revenues of $2.42 billion after preferred dividends came from East Asia, due to a $3.5 bill after-tax gain from B. O. A’s ( BAC ) sale of part of its sake in China Construction Bank. B. O. A’s non-US operations generated $3.48 bln profit, including the gain. Its East Asia operations brought in just about $3.58 bill in the quarter, while its South 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, still faces as it makes an attempt to build a worldwide business. Bank of America has about 55 million consumer and small-business purchasers, making it exposed to delinquencies and defaults, yet also prepared to flourish when the economy recovers.
Bank of America claimed it recorded a $13.4 bn. provision for loan losses during the second quarter as consumers wrestled with debt among rising unemployment, compared to $5.8 billion a year back. On a three-way call with researchers last month, B. O. A Chairperson Ken Lewis asserted “profitability in the 2nd half the year will be much stronger than the 1st half,” given the lack of many one off items that were positive to revenues including the China Construction Bank stock sale. The bank has received $45 bln in rescue funds as an element of the Treasury Departments $700 billion fiscal rescue package. It is not known when it’ll pay back the govt.
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