BofA Posts Massive Loss; Cuts Div to 1 Cent

By Ieva M. Augstums

CHARLOTTE, N.C. -- Escalating credit losses have driven Bank of America (BAC) to report a $2.39 billion fourth-quarter loss and slash its quarterly dividend to a penny.

Earlier Friday, the federal government agreed to inject $20 billion worth of fresh capital into the bank, in addition to the $25 billion in rescue funds BofA already received.

The company reported a profit of $4 billion for the year.

Charlotte-based Bank of America reported a quarterly loss of $2.39 billion, or 48 cents a share. Meanwhile, Merrill Lynch, which was acquired by bank of America last year, posted a loss of $15.31 billion for the period.

After a marathon negotiating session, the Bush administration reached an agreement early Friday to provide Bank of America with an additional $20 billion in support from the government's $700 billion financial rescue fund.

Bank of America had already been granted $25 billion from the bailout fund that Congress passed on Oct. 3, but found it needed more as it sought to cope with rising losses related to its acquisition of Merrill Lynch.

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