The Bank of America is the latest bank to announce poor third-quarter results, with America’s second largest bank hit by a 32% drop in their profit this last quarter. Net income also fell from £2.65 billion to £1.8 billion, whilst share prices fell by 3.4%, meaning they have fallen by 6% this year so far.
The bank is one of many to be afflicted by the instability in the investment banking world, though it could have been worse for the bank, had chairman Ken Lewis not decided in 2001 to pull out of subprime lending, though much of the £257m of structured investments currently being written off has been backed by subprime mortgages .
However, Lewis refused to attribute the blame to the volatility of the market, instead claiming two-thirds of the reason for the bank’s reduced profits was poor judgement.
Bank of America Profits Down
Bank of America Profits Down
Fri, 26 Oct 2007
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