Bank of America posts massive $2.2B Q3 Loss

The U.S. second-largest bank, the Bank of America, has posted poor Q3 (July to Sept) 2009 earnings, posting a massive $2.2 billion (a loss of $0.26 per share) loss in the quarter.

Revenue was up 33-percent in Q3 to $26.04 billion, but the increased losses stemming from an increasing number of people defaulting on their mortgage and credit loans resulted in those two units losing more than $1 billion in the period.

 Bank of America’s credit business totaled losses of $1.04 billion, compared to only $167 million in the same period last year.

The results were worse than Wall Street expectations, with analysts expecting a loss of $0.21 per share.

The bank’s total allowances for ban loans/leases are now set at $35.83 billion.

BA’s wealth management division performed well, almost doubling profits compared to the same period last year.

Bank of America CEO Ken Lewis warned analysts today that, “results in the fourth quarter are expected to continue to be challenging,” likely given adverse macroeconomic factors including increasing unemployment rates in the country.

The Bank of America is facing increased pressure, as government loan payments are due. Following massive payouts to executives, the Obama administration proposed that the bank’s CEO Kenneth Lewis should not be paid a salary (base of $1.5 million) or any bonus in 2009, Lewis later agreed from the mounting pressure and would return $1 million to the bank by the end of 2009.