Updates to add quotes from CFO Price, latest share price
CHARLOTTE, N.C. (
Bank of America
's CEO Ken Lewis on Friday called a peak in credit losses that are plaguing the industry and hurt the firm's third-quarter results.
"We believe we may have peaked in total credit losses this quarter," Lewis said during a conference call with analysts. He added that costs will likely remain "elevated" in future quarters, but not as high as they were in the last period.
"We believe that the economy is stabilizing and customer sentiment is improving," Lewis later added.
CFO Joe Price also said on the call that the bank "continues to be cautiously optimistic" about one high-profile area of credit stress: Unsecured credit card debt. Drops in delinquency rates for the second consecutive quarter led BofA to cut back on reserves for future credit-card losses. Price later said that, excluding a portfolio of badly impaired assets from Merrill Lynch, overall reserve additions would have been "minimal."
However, Price noted that these trends don't apply to a big swath of credit card assets held in
. Those assets are set to come back on the books in January once an accounting rule change takes effect.
BofA touches one half of U.S. households with its wide range of financial services, making its opinion of the health of U.S. consumer credit very important. However, the heads of two other large banks --
Jamie Dimon and
Vikram Pandit -- were more circumspect when reporting quarterly results earlier in the week, and avoided making such a call.
, another big player in consumer credit, will report its third-quarter numbers on Wednesday.
BofA shares were down 5% to $17.19 in mid-morning action after the nation's largest bank reported a
for the third quarter, reflecting higher credit costs and the weight of preferred dividend payments. Volume was already at more than 115 million less than an hour into the trading session. The issue's three-month average volume is 237.6 million.
-- Written by Lauren Tara LaCapra in New York