Bank of America Corp saw third quarter profits drop by more than two-thirds, prompting it on Monday to halve its dividend payments and sell 10 billion dollars in stock to raise money, dpa reported.
"These are the most difficult times for financial institutions that I have experienced in my 39 years in banking," Kenneth D Lewis, the bank's chairman and chief executive said in a statement.
Profits fell 68 per cent to 1.18 billion dollars, or 15 cents per share, from 3.7 billion dollars, or 82 cents per share, in the year- earlier period, the bank said after markets closed Monday.
Its declining profits came largely on industry-wide writedowns of mortgage-backed securities at the heart of the problem that prompted a 700- billion-dollar government bail-out plan, which was signed into law last week. Revenues rose 21 per cent to 19.9 billion dollars from 16.47 billion dollars.
Still, despite the drop in profit, the Charlotte, North Carolina- based bank is weathering the global financial crisis better than many of its rivals that have folded or been in the red. Bank of America has also used the turbulence to expand, snapping up the third-largest investment bank Merrill Lynch for 50 billion dollars last month and mortgage lender Countrywide earlier this year.
The dividend cut to 32 cents will save the bank more than 1.4 billion dollars.