According to yesterday’s Wall Street Journal article, Bank of America Corp. posted its third loss in four quarters, due in large part to continued mortgage-related problems. Compounding the mortgage issues was the recent announcement from the bank of an $8.5 billion proposed settlement with a group of high-profile institutional investors that lost money on mortgage-backed securities purchased before the collapse of the housing market. The ill-timed acquisition of Countrywide Savings is likely to be a drain on BofA’s earnings for years to come.
Despite questions about the bank's ability to meet new global capital standards for banks amid major losses and mortgage charges, CEO Brian Moynihan maintains that a share sale is not necessary and that there is no current push for one from regulators. Still, there is no doubt that BofA’s capital position is considerably thinner than the other large US banks, such as Wells Fargo.
Read full Wall Street Journal article here
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