Bank of America said today it will take a fourth-quarter pretax write-down of approximately $3 billion due to the depreciation of mortgage-related securities. The financial mogul will also spend around $600 million on troubled structured investment vehicles, as well as $300 million on the damage from a mediocre investment.
What's more, according to Dow Jones Newswires, the bank's CEO Joseph Price said the market for syndicating loans made to finance leveraged buyouts remains 'fragile.' The aforementioned market will be tried soon, when large banks will be bringing larger deals to the market. The CEO continued on, stating that conditions in the CDO market could worsen and that BAC won't restore its share buybacks (cut after acquiring LaSalle Bank Corp in early October) before the summer of 2008.
In comparison to other equities in the financial sector, Bank of America and Merrill Lynch (MER) hold the worst possible Zacks rankings of 5, as Citigroup (C) comes in with a 4, and J.P. Morgan Chase (JPM) is docked at 3. Though the subprime mortgage crisis has hit the aforementioned securities hard, analysts polled by Zacks give Bank of America the best ratings of the group, with 6 strong buy rankings, 1 buy ranking, 8 hold rankings and no sell or strong sell rankings.
Technically speaking, since its 10-day and 20-day moving averages made a bearish cross on October 19, BAC has steadily declined to hit a new annual low of $42.02 on November 8. Currently, Bank of America is up 4.12%, docked at $45.80.