New York - AFP
Bank of America on Tuesday reported a net loss of $9.1 billion in the second quarter, in line with expectations after it agreed to pay out an $8.5 billion settlement over subprime mortgage claims. The bank\'s revenues in the April-June period were $13.2 billion, a drop of 55 percent from the same period last year. Analysts had expected revenues of $12.3 billion. Bank of America\'s earnings amounted to a loss of 90 cents per share, in line with forecasts after its record settlement over losses on mortgage-backed securities. Without exceptional items -- most prominently the mortgage settlement -- the giant bank would have posted a profit of $3.7 billion, or 33 cents per share. \"Obviously, the solid performance in our underlying businesses continues to be clouded by the costs we are absorbing from our legacy mortgage issues,\" chief executive Brian Moynihan said in a statement. Bank of America\'s shares rose 0.5 percent in pre-market trading after the release of the earnings report. The $8.5 billion payout to 22 large private investment groups was meant to settle issues from the bank\'s disastrous 2008 acquisition of Countrywide Financial, once one of the biggest US mortgage lenders. Along with that payout, Bank of America set aside $5.5 billion for pending liabilities to other investors not included in the settlement. Until 2008, Countrywide played a leading role in generating mortgages that were bundled into securities and resold to investors. Following a downturn in the US housing market, many homeowners fell behind on their payments and such mortgage-backed securities plunged in value, triggering the global financial crisis. Bank of America, the largest bank in the United States in terms of deposits, hoped to put the subprime mortgage collapse behind it with the costly settlement.