Bank of America Sees 4th-Qtr Bad Loan Write-Offs Doubling

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11/14 18:27 Bank of America Sees 4th-Qtr Loan Write-Offs Doubling (Update1) By Michael Nol

Charlotte, Nov. 14 (Bloomberg) -- Bank of America Corp., the largest U.S. bank, said fourth-quarter losses from bad loans could be more than $870 million because a slowing economy has made it harder for consumers and businesses to repay debts.

Bank of America said in a quarterly filing with the Securities and Exchange Commission that it may write off more than double the $435 million of bad loans recorded in the third quarter.

The Charlotte-based bank said the rise in losses resulted from a combination of one large corporate loan to the consumer services industry that went bad, $100 million of bad consumer loans written off to comply with a new federal accounting rule, and losses resulting from further weakening in the economy.

A Bank of America spokesman, Robert Stickler, declined to provide any further details of the corporate loan that went bad.

``The banks seem to make the same mistakes over and over again by making lousy loans,'' said Jon Burnham, portfolio manager of the $230 million Burnham Fund. ``The economic growth rate has slowed, which will have some effect on fourth quarter earnings.''

The economy grew more slowly in the third quarter than it did in more than a year, damped by a year of rising interest rates as the Federal Reserve moved to stem inflation. The central bank, led by Chairman Alan Greenspan, raised short-term interest rates six times since June 1999, from 4.75 percent to the current 6.5 percent.

Bank of America shares fell $1.56 to $45.88 in trading on the New York Stock Exchange earlier today amid fears that bad loans would hurt the bank. The filing was made after the close of trading.

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-- Carl Jenkins (somewherepress@aol.com), November 15, 2000


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