Bank of America Corp. says trouble may be ahead for its credit card portfolio. "Largely due to increased unemployment and increased bankruptcies, this portfolio is also experiencing rising delinquencies and losses," Kenneth D. Lewis, chairman, CEO and president, told analysts during a conference call yesterday. BofA charged off nearly $3 billion in managed credit card receivables during the third quarter ended Sept. 30, up 50% from $2 billion during the same quarter last year. Charge-offs during the quarter represented 6.4% of BofA's card receivables, up 173 basis points from 4.67% last year. BofA is focusing much of its loss-mitigation efforts, including tighter account management and increased collections, on California and Florida, where losses to home values also have created higher losses in credit card receivables, Lewis said. Average outstanding card loans during the quarter totaled $186.4 billion, up 8% from $172 billion last year. BofA reported interest income on domestic credit cards of nearly $1.7 billion during the quarter, down 6% from nearly $1.8 billion a year earlier. On cards issued outside the United States, BofA reported $535 million in interest income, up 44% from $371 million a year ago. BofA reported noninterest card income of $3.1 billion for the quarter, down nearly 14% from $3.6 billion last year. Purchase volume on credit cards was $62.7 billion, down 1% from $63.5 billion. BofA did not include detailed profit-and-loss statements for individual lines of business as part of its early earnings announcement yesterday. BofA says it will release that information later this month.
