Instant view: Bank of America reports wider quarterly loss

NEW YORK (BestGrowthStock) – Bank of America Corp (BAC.N: ), the largest U.S. bank by assets, said on Wednesday net its third quarter net loss quadrupled from a year ago, as the bank recorded a previously announced $10.4 billion goodwill charge for its card businesses.

The Charlotte, N.C.-based bank reported a net loss of $7.3 billion, or 77 cents per share, from a year-earlier loss of $2.2 billion, or 26 cents per share.

Excluding the non-cash goodwill charge, the bank reported net income of $3.1 billion, or 27 cents per share, beating analysts’ forecast for EPS of 16 cents, according to Thomson Reuters I/B/E/S.

The following is reaction from industry analysts and investors:

CHRISTIAN BLAABJERG, HEAD OF EQUITY STRATEGY, SAXO BANK,

COPENHAGEN

“Bank of America surprised massively to the upside with an EPS of 27c vs. the streets estimate of 14c. But at the same time they took a hit on goodwill, making a write-off by $10.4 billion. The surprisingly strong result was primarily driven by less credit costs –improvement in the credit portfolio– and to a lesser extent fees in asset management and investment banking.”

“Their Tier 1 Common Equity Ratio continues to strengthen and this is noteworthy as the Basel III rules has tightened the standard requirements for holding equity capital. The reported number clearly brings Bank of America on the safe side of the line.”

HEINZ-GERD SONNENSCHEIN, STRATEGIST AT POSTBANK, BONN

“The decreasing risk provisions is something that we’ve seen happening at all banks. The question for BofA is whether it can continue that trend.”

DAVID MORRISON, MARKET STRATEGIST, GFT GLOBAL MARKETS,

LONDON

“The BofA numbers look all right, but I am just so suspicious of these banks at the moment …. I just can’t help thinking that these guys are up to their necks as far as the foreclosure mess is concerned and it’s getting downplayed at the moment, but I think it’s too big an issue to disregard … so I would be very wary of taking long positions in them”

MIC MILLS, HEAD OF ELECTRONIC TRADING, ETX CAPITAL, LONDON

“A much better (than expected) bottom line number, (but) the main problem is banks have all been downgraded this quarter so (it’s) fighting against that.”

HEINO RULAND, ANALYST, RULAND RESEARCH, FRANKFURT

“These numbers were better than expected but after the Citi numbers earlier this shouldn’t come as a huge surprise. The Tier 1 capital is very comfortable and this should encourage investors too. We also see that many banks — like BofA — are still earning on bonds at the cost of the Fed. In principle and in summary though, these figures are very encouraging and very positive.”

(Reporting by Tricia Wright in London, Blaise Robinson in Paris, Joanne Frearson and Jon Hopkins in London, Christoph Steitz in Frankfurt and Josephine Cox in Frankfurt )

Instant view: Bank of America reports wider quarterly loss