Bank of America Corp. said Monday its profit fell 77 percent in the first quarter, hurt by trading losses and a $3.3 billion increase in reserves for problem loans, the Associated Press rerpots.
The Charlotte-based bank, set to acquire troubled subprime mortgage lender Countrywide Financial Corp. later this year, reported earnings of $1.21 billion, or 23 cents per share, on $17 billion in revenue. That compared with net income of $5.26 billion, or $1.16 a share, a year earlier on $18.16 billion in revenue.
Analysts on average expected a profit of 41 cents per share on revenue of $16.5 billion, according to Thomson Financial.
In early trading, the bank’s shares dropped 42 cents to $38.14.
Major national banks like Bank of America continue to be besieged on two sides: The bread-and-butter banking business is struggling because of the slumping housing market. With home prices flagging, more people and real estate developers are failing to repay their loans.
The credit crisis is also hobbling the value of many bank investments.