Bank Of America Still Facing Hurdles
Bank of America (NYSE:BAC) has been getting some better news lately, but the company isn't out of the woods just yet. As the company proved recently, there are still many challenges in their core US operations mainly related to consumer and business credit quality.
In the quarter ended June 30, BAC announced they lost $255 million from their North American operations.
The company would have lost money globally, if not for a $3.5 billion after-tax gain fromits sale of part of China Construction Bank Corp.
With that gain included, total global profits were $3.43 billion. Bank of America (NYSE:BAC) has been adding to its loan loss reserves. In the second quarter they added $13.38 billion. They expect that consumer and business loan losses will continue to rise, at least in the immediate long term.
Bank of America (NYSE:BAC) is in the same boat as their rivals. They are attempting to build up their operations despite the fact that the consumer and business cash cow customers are hurting.
Without these one-time gains, the company admitted they would have a tough time making money in 2009.
"Profitability in the second half of the year will be much tougher than the first half," said CEO Kenneth Lewis.
For the quarter, Bank of America (NYSE:BAC) did $32.77 billion in revenue, including Merrily Lynch.
Right now Bank of America (NYSE:BAC) seems to be recovering nicely from their troubles, but impressive profits are still in the distance.
Courtesy: Superior Investor
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