Medicine man

21 January 2011 By Antony Currie Follow @AntonyMCurrie

The Charlottebased bank’s stock has lagged major rivals as crisis concerns linger. Meanwhile fellow TARP doubledipper Citi rebounded as its restructuring took hold. If BofA boss Moynihan can convince investors it has taken the same medicine, its stock should recover.

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Bank of America reported a fourthquarter loss of $1.2 billion. The bank set aside $4.1 billion to cover mortgage representations and warranties expenses and took a $2 billion goodwill impairment charge to its Home Loans and Insurance business, actions it announced at the start of the year.

In addition, BofA added $1.5 billion to cover future litigation expenses, mostly to cover other mortgagerelated costs. It also took a $1.2 billion hit to revenue from improvements on the price of its own structured liabilities, mostly related to Merrill Lynch debt.

The bank also registered a number of extraordinary pretax gains: $100 million from selling much of its BlackRock stake, $400 million from selling its CCB rights, $900 million of securities gains, $1.7 billion from releasing loan loss reserves and a $2.4 billion tax benefit.

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