“These are extraordinary times. The credit markets literally hit a wall, and nobody lending to consumers or who is in the capital markets is immune.”
— Bank of America CEO Ken Lewis in a conference call with investors Friday morning, following the government announcement that BofA would receive another $20 billion from its Troubled Asset Relief Program.
BofA also gets guarantees on $118 billion of assets backed by soured real-estate loans, most of which came with BofA’s purchase of Merrill Lynch. Lewis said that after paying $50 billion for Merrill Lynch in September, BofA discovered in December that its asset deterioration was “much, much higher” than forecasted. BofA’s market cap is now $36 billion. The bank reported a quarterly loss of $1.8 billion this morning and the stock closed down 1.14% at $7.18.
Elsewhere in the banking world, the stock price of Citigroup, which lost 43% of its value over the past week, dropped another 9% Friday to $3.50, on news of an $8.3 billion quarterly loss. On Thursday JPMorgan Chase reported its quarterly profits plummeted 73%, but the firm still managed to stay in the black. Its stock fell 6% on the news and lost another 1.5% today to settle at $22.82. — Jessica Shambora