|
CNBC'S MOST SHARED
- Unemployed? Bored? Make Money Playing Beer Pong
- WPP's Sir Martin Sorrell on the Ad Recession
- Social Networking's 'Naked' Truth
- Merrill's McCann Seen as UBS Wealth Frontrunner
- Warren Buffett's Top Three Investment Rules for the Average American
- The View From Newark
- Fast Funds: Hot Ways To Play China
- Eric Schmidt on Government Scrutiny and Economic Recovery
- Warren Buffett's Complete Sun Valley CNBC Interview - Transcript and Video
- Government Selling Bank Stakes for Too Cheap: Panel
- Buffett's Top 3 Investment Rules for Average Americans
- Market Insider: Earnings Loom in the Week Ahead
- Bulls Get Summertime Blues, But It's Hot Fun for Bears
- As Banks Fail, Strong Institutions Become More Visible
- GM IPO in Second Quarter 2010 at the Earliest: CFO

- Merrill's McCann Seen as UBS Wealth Frontrunner
- It's Not the Wealthy Who Are Leaving California: Study
- Atlantic City Takes Hit as Pennsylvania Casino Opens
- Eric Schmidt on Government Scrutiny and Economic Recovery
- Market 360: The Week's Best & Worst
- Geek Squad V. Gizmodo
- Brandt: Google Chrome OS in the Post-PC Age
- Other People Are Weirder Than We Are
- Bank Failures: Is The Nightmare Over? (Video)
- California Here I Go? No.
- Roginsky: No More Mr. Nice Guy
- Commercial Conundrum
Bank of America, the nation's second-largest bank, reported rising credit costs Tuesday, as it continues to wade through a challenging economic cycle.
![]() |
Oliver Quillia for cnbc.com Bank of America branch, New York City. |
At an investor conference in New York, Liam McGee, Bank of America's president of global consumer and small business banking, said customers are feeling "significant economic pressure" as deflating home prices leave little equity for consumers to borrow against.
The Charlotte-based company said it expects losses in its home equity portfolio to increase in the near-term and projected future losses in that area that exceed the bank's earlier range of 2 percent to 2.5 percent.
"It will be higher than 2.5 percent," said McGee, adding that California and Florida are driving losses within the consumer-credit business. "I think we are doing all the right things to mitigate it and we will just have to manage through it."
Shares [BAC
Loading...
()
] fell 29 cents to $37.15 in morning trading.
To offset pressure from market turmoil, McGee said Bank of America has targeted what it calls the "mass affluent" consumer segment as its largest growth category. The segment, which includes consumers with $100,000 to $3 million to invest, accounts for 23 percent of the bank's total households and holds more than $500 billion in deposits at other firms.
The company also sees so-called affinity accounts helping put its credit card segment in position for growth. Such accounts are linked with sports teams, alumni and special-interest groups, among others. McGee noted that the bank's affinity portfolio has been demonstrating "superior credit quality."
What will also help, McGee said, is Bank of America's acquisition of California lender Countrywide.
While admitting the company had not anticipated some challenges of the current economic environment, McGee called the pending purchase "positive" and "significant," adding that it will give Bank of America "leadership in home lending."









