US second largest bank losses by Claudia Sonea

US economy is trembling due to the housing slump, oil record prices and the weakening of the dollar. In the dawn of the G-7 meeting many have great expectations that new rate cuts will take place in order to accelerate the slow rhythm of the economy. However, the situation is far from being over, the second largest bank in US, Bank of America Corp. reported a 32 percent profit drop in the third quarter. The CEO Kenneth Lewis blamed his bank's problems and traders' mistakes for the record losses. As it is, some businesses and infrastructure will be eliminated. Charlotte-based bank reported that profits declined from $5.42 billion to 3.7 billion, therefore the bank's revenue fell to 16.3 dollars. It's not only that it did not fulfilled expectations, but also was way below the expected earnings of $1.06 per share on revenue of $18.3 billion reveals a poll made by Thomson Financial. Built under CEO Hugh McColl Jr, Bank of America's goal is to expand as much as it can and in consequence the bank acquired in 2004 FleetBoston Financial, in 2006 credit card issuer MBNA Corp, while this year in July the new acquisition was management company U.S. Trust Corp and in October it took over LaSalle Bank Corp. The bank spent $247 million for leveraged loans and other financing commitments, and suffered a $607 million trading loss. Provided that Lewis assured for a careful analysis and a clarification in the weeks ahead, the company might regain the record losses. Furthermore, according to Friedman, Billings, Ramsey & Co. analyst Gary Townsend the bank's expense controls are solid and a slight expansion in net interest margin is positive and wealth-management revenue increased 24 percent to $2.2 billion. Other banks have reported losses too: New York's Citigroup Inc. and JPMorgan Chase & Co, The Bank of New York Mellon Corp, Capital One Financial Corp, etc. There is a problem widely spread nowadays in US. Where everything is heading….stay connected!

related story: http://news.yahoo.com/s/ap/20071018/ap_on_bi_ge/earns_banks;_ylt=AsU6Ddlj6Vnf_4Pkxys3X7Ks0NUE

by Claudia Sonea for PocketNews (http://pocketnews.tv)

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