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Bank of America, slammed by writedowns and rising credit costs, on Monday said earnings dropped nearly 80 per cent in the first quarter to $1.2bn.
The largest US bank by market value said provision for credit losses soared by $4.78bn to $6.01bn, driven by problems in home equity and small business loans as well as loans to homebuilders.
The bank had $1.47bn in writedowns on its collateralised debt obligations and $439m on its leveraged loan commitments. The numbers were down significantly from the fourth quarter, in which BofA had $5.15bn in writedowns leading executives at the bank to stage a sharp pullback from the investment banking business.
Overall, BofA said it earned $1.21bn, or 23 cents a share, down from $5.26bn, or $1.16, last year. The figures fell short of analyst estimates of a profit of 41 cents a share. Net revenue dropped 6 per cent to $17bn.
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