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BankAmerica tallies impact
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September 15, 1998: 10:14 a.m. ET
Emerging markets take $330M toll, but $500M 3Q operating profit seen
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NEW YORK (CNNfn) - BankAmerica Corp. warned Tuesday that adverse global market conditions will affect its third-quarter earnings, joining the ranks of other financial institutions that have cited exposure to struggling emerging markets as the cause of lower earnings.
BankAmerica said it has lost approximately $330 million in trading income to date in the third quarter, compared with trading income of $119 in the second quarter and $251 million in the first.
In late August, BankAmerica announced quarter-to-date trading losses of $220 million, meaning it has lost an additional $110 million in the last two and a half weeks. At the time, the bank said the losses were primarily responsible for reducing its Russian Federation exposure to about $100 million at Aug. 26 from $412 million at June 30.
BankAmerica said market turbulence has also caused its income from equity investments to slip to $30 million in July and August, compared with $125 million in the second quarter.
Nonetheless, BankAmerica said it expects to report a third-quarter operating profit of $500 million, saying its "consumer business trends remain solid."
BankAmerica's profit expectations don't include merger-related charges. The company is expected to vote in favor of its proposed merger with NationsBank Corp. (NB) when the companies' shareholders meet Sept. 24.
NationsBank said BankAmerica's statement won't affect their merger plans.
BankAmerica joins an all-star roster of financial services firms -- including Citicorp (CCI), Bankers Trust Corp. (BT) and Donaldson, Lufkin and Jenrette (DLJ) -- that have warned of lower quarterly earnings because of exposure to emerging markets, particularly Russia.
BankAmerica (BAC) shares closed at 63-13/16 in Monday trading. 
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BankAmerica
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