|
BankAmerica 3Q collapses
|
 |
October 14, 1998: 9:12 a.m. ET
Nation's ninth-largest bank blames global volatility; hedge fund losses total $400M
|
NEW YORK (CNNfn) - BankAmerica Corp. Wednesday blamed global market volatility and expenses related to its merger with NationsBank for its dramatic shortfall in third-quarter earnings.
The nation's ninth-largest financial institution posted net income for the quarter ended in September of $374 million, or 21 cents a diluted share. The results include a $519 million after-tax charge for costs related to its merger with NationsBank.
Last year, the bank earned $1.73 billion, or 96 cents a share.
Third-quarter operating earnings reached $893 million, or 50 cents a diluted share, compared with $1.77 billion, or 99 cents a share, in the year-ago quarter.
Analysts polled by First Call were predicting the company would earn 90 cents a share.
BankAmerica also posted a trading loss of $529 million, versus revenue of $281 million a year ago.
"While we are not satisfied with our bottom line, we are encouraged that loan growth and consumer banking performance remain positive," Hugh L. McColl Jr., chairman and chief executive officer, said. "Loan growth was strong across the board. We also experienced growth in our credit card and deposit businesses. And our overall credit quality continued to be good. In all, we believe this quarter did not reflect the earnings power we have with the new Bank of America. We remain incredibly enthusiastic about our company's future."
For the first nine months, operating earnings totaled $4.89 billion, or $2.73 per diluted share, compared with $5.13 billion, or $2.82 a share, last year. Net income for the period fell to $4 billion from $5.08 billion.
BankAmerica Corp. and NationsBank Corp. merged on Sept. 30, 1998, creating the new BankAmerica Corp. The most recent quarter results reflects the combined financial results for the new company.
The New York Times Wednesday reported that BankAmerica Corp. would disclose an estimated loss of about $100 million due to hedge fund activities.
The institution's overall exposure to the hedge fund, D.E. Shaw & Co., is estimated at as much as $1 billion, in the form of either loans or credit lines, according to the report.
BankAmerica reported instead losses of around $400 million from hedge fund exposure.
Shares of BankAmerica (BAC) closed up 1-1/8 Tuesday at 53-15/16 on the New York Stock Exchange. 
|
|
|
|
|
|
BankAmerica
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
