Posted
Oct 19 2007, 08:08 AM
by
Matt Koppenheffer
Shareholders contemplating Bank of America's third-quarter earnings are likely reacting with one word: "yuck."
The investment banking division of the bank -- which includes capital markets, advisory services, business lending, and treasury services -- was absolutely miserable. Net revenue for the segment was down 44% over the prior year, and the segment's net income, which accounted for more than a quarter of Bank of America's total net income in its third quarter of last year, fell an astonishing 93% to $100 million.
Pretty much everything that could go wrong did go wrong in that segment. Most notable of all were the capital markets and advisory services, which managed to produce a negative $184 million in revenue. These guys might even make Bear Stearns look good. And what did Bank of America have to say for itself?
"Unprecedented market disruptions impacted trading results."
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