IMGCAP(1)]
Citing the weakening global economy, Bank of America Corp. today announced its global card services business posted a net loss of $1.04 billion during the third quarter ended Sept. 30. The unit posted a $167 million net loss during the same period a year ago. Total revenues net of interest expense were $7.33 billion, down 5.4% from $7.75 billion, which BofA attributed primarily to lower fee income. The company said it increased its provision for loan losses to $6.98 billion, up 24.6% from $5.6 billion. The issuer charged off $5.48 billion of net managed card receivables, up 82.7% from $3 billion a year earlier. The net charge-off rate on those receivables was 12.9%, up 650 basis points from 6.4% during the same quarter a year ago. BofA managed an average of $168.46 billion in credit card loans during the quarter, down 9.6% from $186.41 billion. Credit card purchase volume during the quarter totaled $53.03 billion, down 15.4% from $62.66 billion. Purchase volume on BofA debit cards totaled $54.76 billion, up 2.9% from $53.23 billion. Despite tough economic conditions, BofA added some 700,000 new retail and small-business accounts in the U.S. during the quarter, Joe L. Price, BofA chief financial officer, said during a conference call with analysts today. Moreover, BofA's most-recent data show some improvement in credit card delinquencies, giving the company reason to be "cautiously optimistic" that losses may be stabilizing, he noted.
