CHARLOTTE, N.C. - Bank of America Corp.'s plunging profits shocked Wall Street on Thursday and prompted a clearly frustrated chief executive Kenneth Lewis to say that changes loom in its investment banking business.
"I've had all of the fun I can stand in investment banking at the moment," said Lewis, who heads up the nation's second largest bank. "So to get bigger in it is not something I really want to do."
As the last of the nation's top three banks to report results this week, Bank of America's news suggests that the problems in the credit market may yet be closer to the beginning than an end. But while Lewis blamed some of his bank's problems on those market conditions, he admitted his traders also made plenty of mistakes.
"What I can't say is that we'll stay the course," Lewis said on a call with analysts, after his company posted a 32 percent profit drop in the third quarter. "The probability of changes and eliminations of some businesses and infrastructure ... is very high."
Bank of America's shares fell $1.18 to $48.85 Thursday, after the Charlotte-based bank said net income declined to $3.7 billion, or 82 cents per share from $5.42 billion, or $1.18 per share, a year ago. The bank's revenue fell 12 percent to $16.3 billion.
Analysts expected earnings of $1.06 per share on revenue of $18.3 billion, according to a poll by Thomson Financial. The earnings estimates typically exclude one-time items.
The very idea of a retrenchment is anathema at Bank of America, a growth obsessed company built first under previous chief executive Hugh McColl Jr., and since 2001 under Lewis, into a retail banking behemoth.
In 2004, the bank acquired FleetBoston Financial. A year ago it purchased credit card issuer MBNA Corp.
In July, the bank completed its purchase of wealth management company U.S. Trust Corp. and earlier this month it took over LaSalle Bank Corp. to expand its presence in Chicago.