The march of losses and significantly lower earnings commenced last week, with Citigroup reporting a $2.8-billion net loss, and Merrill Lynch—soon to join Bank of America—lugging a loss on continuing operations of $5.1 billion. Citi’s credit costs soared; the bank endured $4.9 billion in net credit losses and registered a $3.9 billion in increased loan reserves. And Citi took $4.4 billion in pretax net writedowns in securities and banking.
JPMorgan Chase saw its earnings dwindle to $527 million from $3.37 billion in third quarter 2007, while income from continuing operations at Bank of New York Mellon shrank to $305 million from $642 million on a year-over-year basis. Wells Fargo reported a more benign decline, with net income slipping to $1.64 billion from $2.17 billion. PNC Financial Services, BB&T Corp., and Zion’s Bancorporation all reported severe erosion in net income during the third quarter.