Loan losses cost US bank $2 billon

Bank of America Corp. said Friday it lost more than $2 billion in the
third quarter as loan losses kept rising, providing further evidence
that consumers are still struggling to pay their bills.    The
nation's second-largest bank, which lost $2.24 billion after
accounting for preferred dividends, said its losses for failed loans
came to almost $10 billion during the July-September period, up
almost $1 billion from the second quarter. The bank also added $2.1
billion to its reserves to cover bad loans, bringing its total
reserves to $11.7 billion.    Bank of America's results were aided by
profit from investment bank Merrill Lynch, including income from
bond, stock and currency trading.    Its earnings follow the pattern
set this week by Citigroup Inc. and JPMorgan Chase & Co., which also
reported more loan losses during the third quarter as consumers
struggled to keep up with their credit card and mortgage payments.
Both JPMorgan Chase and Goldman Sachs Group Inc. reported big gains
from their trading operations.    Bank of America said it lost $2.24
billion, or 26 cents per share, after accounting for the preferred
dividends of $1.24 billion. That compared with earnings of $704
million, or 15 cents per share, a year earlier.    Revenue in the
quarter increased 33 per cent to $26.04 billion.    The loss was 5
cents more per share than the 21 cents forecast by analysts surveyed
by Thomson Reuters Inc. Investors sent Bank of America shares down
59 cents, or 3.3 per cent, to $17.51 in premarket trading. Shares
closed Wednesday at $18.10.    'Obviously, credit costs remain high,
and that is our major financial challenge going forward,' CEO Ken
Lewis said in a statement accompanying the earnings report. 'However,
we are heartened by early positive signs, such as the leveling of
delinquencies among our credit card numbers.'    Bank of America is
considered particularly vulnerable to unemployment, which climbed
last month to 9.8 per cent in the U.S. Economists predict the jobless
rate will pass 10 per cent in the coming months.    The bank's
massive portfolio of credit-card loans could be an for how well the
industry at large will fare. The bank has about 53 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's global card services unit loss widened significantly
to $1.04 billion from $167 million a year ago.    The loss in the
bank's home loans and insurance division grew to $1.6 billion from
$54 million a year ago, as credit costs continued to rise.    The
bank, which being investigated by federal authorities for its Merrill
acquisition, 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.    Lewis, who is
retiring at year's end, has agreed to give up his salary and other
compensation for 2009.