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Bank of America sees $194m loss Bank of America sees $194m loss
(20 minutes later)
Wall Street giant Bank of America has reported a net loss of $194m (£120m) in the last three months of 2009.Wall Street giant Bank of America has reported a net loss of $194m (£120m) in the last three months of 2009.
That compared with a loss of $1.8bn in the same period a year earlier.That compared with a loss of $1.8bn in the same period a year earlier.
It added that it had repaid the $45bn government bail-out money it had received, but taking the impact of this into account, it made a loss of $5.2bn.It added that it had repaid the $45bn government bail-out money it had received, but taking the impact of this into account, it made a loss of $5.2bn.
Meanwhile, Morgan Stanley said it made a profit of $413m in the fourth quarter, helped by a return to profit in its investment banking business.
A year ago, the bank reported a $10.5bn loss, the bulk of which came from investment banking, which made massive losses at the height of the financial crisis.
Morgan Stanley also said it had set aside $14.4bn in compensation expenses for 2009 - a 31% increase on the previous year.
Earlier this week, fellow US bank JP Morgan Chase reported a profit of $3.3bn, while Citigroup said it made a $7.6bn loss in the final quarter.Earlier this week, fellow US bank JP Morgan Chase reported a profit of $3.3bn, while Citigroup said it made a $7.6bn loss in the final quarter.
For the whole of 2009, Bank of America made a net profit of $6.3bn, an increase on the $4bn profit it made in 2008.
'Disappointing' loss'Disappointing' loss
For the whole of 2009, Bank of America made a net profit of $6.3bn, an increase on the $4bn profit it made in 2008.
The bank also said it had set aside $10.1bn to cover bad loans during the quarter.
"While it's disappointing to report a loss for the fourth quarter, there were a number of important accomplishments worth noting," said chief executive Brian Moynihan."While it's disappointing to report a loss for the fourth quarter, there were a number of important accomplishments worth noting," said chief executive Brian Moynihan.
"First, we repaid the American taxpayer, with interest, for the Tarp [Troubled Asset Relief Program] investment."First, we repaid the American taxpayer, with interest, for the Tarp [Troubled Asset Relief Program] investment.
"Second, we have taken steps to strengthen our balance sheet through successful securities offerings. And third, all of our non-credit businesses recorded positive contributions to our results.""Second, we have taken steps to strengthen our balance sheet through successful securities offerings. And third, all of our non-credit businesses recorded positive contributions to our results."
Bank of America received the Tarp money after agreeing to buy Merrill Lynch in September 2008 in a deal worth $50bn. 'Strange creature'
Bank of America said paying back the Tarp money cost it $4bn.
It received the money after agreeing to buy Merrill Lynch in September 2008 in a deal worth $50bn.
The chief executive at the time, Ken Lewis, was widely criticised for going ahead with the purchase of Merrill, and he left the bank at the end of 2009.The chief executive at the time, Ken Lewis, was widely criticised for going ahead with the purchase of Merrill, and he left the bank at the end of 2009.
His successor, Mr Moynihan, was upbeat looking at the year ahead. The bank was now a "strange creature", said Stephen Pope, chief global equity strategist at Cantor Fitzgerald.
"As we look at 2010, we are encouraged by signs the economy is improving, as we have seen in the stabilisation of our credit costs, particularly in the consumer businesses," he said. "You have got Merrill Lynch on the investment banking side... [providing] probably healthy revenues from bond underwriting and trading.
"That said, economic conditions remain fragile and we expect high unemployment levels to continue, creating an ongoing drag on consumer spending and growth." "However, Bank of America is probably still facing difficulties of impairment charges against outstanding commercial and consumer debt."
Bank of America's credit cards division made a quarterly loss of $1bn, while its mortgage business lost $993m.