Bank of America, JPMorgan face $3B hit - reportCombined loss would bring total writedowns from subprime-related securities to $20 billion, says the Financial Times.NEW YORK (CNNMoney.com) -- Bank of America and JPMorgan Chase are thought to be on the verge of announcing combined losses of $3 billion from mortgage-backed securities and leveraged loans when they report third-quarter earnings this month, according to a news report today. The announcements would bring total losses at the world's leading banks from subprime-related assets to $20 billion, said the Financial Times. JPMorgan (Charts, Fortune 500) is expected to announce losses on leveraged loans of $1.4 billion, Sanford Bernstein analyst Howard Mason said in the report. He also anticipates it will suffer an additional $700 million in writedowns on mortgages and mortgage-backed securities, said FT. Bank of America (Charts, Fortune 500) is expected to see around $700 million in leveraged loan losses and mortgage writedowns of $300 million. JPMorgan and BoA do a lot of lending to private equity firms, so most of their writedowns will come from leveraged loan commitments they'd have to take a loss on if they sold now, the paper reported. Merrill Lynch (Charts, Fortune 500) reported the largest credit-related losses at $5 billion. UBS (Charts) said it had $3.7 billion in writedowns, while Deutsche Bank (Charts) had$3.1 billion and Citigroup (Charts, Fortune 500) reported $2.7 billion. Washington Mutual (Charts, Fortune 500) reported a hit of $410 million last week. Smaller banks such as Wachovia (Charts, Fortune 500) are also expected to announce writedowns proportionate to their size. |
Sponsors
|