BOA makes money despite losses - Other News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » BOA makes money despite losses

BOA makes money despite losses

BOA makes money despite losses
The content is accurate at the time of publication and is subject to change.

The credit card division of the Bank of America has shown profits in the fourth quarter despite its overall loss. This profit is caused by consumer’s overall spending throughout 2010 and a decline on payment defaults. These results however, don’t show a realistic value as the Bank of America recently reported a fourth-quarter loss of $1.24 billion.This was as a result of the boosts in provisions that were tiered with litigations, and faulty loans, which impacted the value of the mortgage sector. For the year 2010, the bank posted an overall net loss of $2.24 billion; this was fueled by write offs, as the revenue had declined to $111.4 billion, a 7.9% drop.

Global Card Services also showed in their fourth-quarter a profit of $1.5 billion, however, had it not been for the $10.4 billion charge back during the third quarter, this fourth quarter would have shown a positive trend for their entire fiscal.

This write down, which is referred to as the goodwill impairment charge, was the outcome of the loss of future revenues, that was acknowledged by the bank; these further losses was attributed by the new restrictions imposed by the Federal laws with limits on fees charged.Not having these new rules, the potential earnings would have been over $3.8 billion, but as a result of this fee restructuring, the card company had a loss of $6.6 billion.

The current improvement in performance is being driven by the reduction in interest, as well as the lower costs in using credit.It may also be noted however, that since 2009, customers has kept their balances low, and as a result, the creditors revenue had decreased by $3.4 billion; this decline, factored with the fee restructuring, the bank lost the income it would have earned.

As the number of reported delinquencies and bankruptcies fell, credit card services might now reduce a $16.9 billion provision it had made in 2010 for incrementing losses.

Since the acquisition of Countrywide Financial Corp in 2008, the bank has been saddled with lawsuits, as well as having to repurchase previous bad loans.Earlier this month, the bank stated that it had agreed to Freddie Mac and Fannie Mae $2.8 billion in settlement that would trigger a $3 billion fourth-quarter provision.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

Startups Now Get More Rewards with the Brex Card

Posted: December 19, 2018

The Brex card has upgraded its rewards package for Startups, cardholders now earn four points for every dollar they spend when using Brex Travel to book trips. In the past cardholders earned 3 points on travel. They also now get access to ... Continue reading
Chase Freedom Categories for January Unveiled

Posted: December 17, 2018

With the Chase Freedom credit people earn 5% cash back in three bonus areas per quarter, and they have just announced the offerings for the next quarter. Cardholders will earn enhanced rewards when they pull up to the gas station, make ... Continue reading
Get 100,000 Bonus Points with the Radisson Rewards Premier Visa Signature

Posted: December 14, 2018

If you have been thinking about getting the Radisson Rewards Premier Visa Signature credit card, now might be the time to take another look because it now comes with 100,000 bonus points. This is a limited time offer, which is in play from ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate.
For Excellent, Good Credit
INTRO OFFER: Discover will match ALL the Miles you've earned at the end of your first year, automatically. For example, if you earn 30,000 Miles, you get 60,000 Miles. That's $600 towards travel!
For Excellent, Good Credit
Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay
For Excellent, Good Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!