22 Jan 2011

Major writedown by Bank of America

6:01 am on 22 January 2011

Bank of America has reported a second consecutive quarterly loss, due to a $US2 billion writedown of its mortgage business.

The bank announced a net loss of $US1.2 billion in the last three months of 2010, compared with a $US5.2 billion loss a year ago.

However, last year's results included a $US4 billion charge related to the Troubled Asset Relief Programme (TARP).

Chief executive Brian Moynihan said 2010 was a "necessary repair and rebuilding year".

"Our results reflect the progress we are making at putting legacy - primarily mortgage-related - issues behind us," he said.

The bank previously warned that it would write down the value of its mortgage business, given the foreclosure crisis in the United States.

Excluding the writedown, the bank made a profit of $US756 million.

The BBC reports the charge in the fourth quarter was not the only one the bank made last year.

The group's third-quarter results also included a $US10 billion writedown of its cards business.

Writedowns for the whole of 2010 totalled $US12.4 billion, leaving the bank with a net loss of $US2.2 billion for the year.