Bank of America, Wachovia Earnings Down More Than $6 Billion

Charlotte, N.C.–The second- and fourth-largest U.S. banks–Bank of America Corp. and Wachovia Corp., both headquartered in Charlotte, N.C.–reported a more than $6 billion combined mortgage-related earnings loss Tuesday, Bloomberg reports.Fourth quarter profit fell 95 percent at Bank of America to $268 million. Wachovia’s net income plummeted 98 percent to $51 million.Bank of America’s total fourth quarter revenue dropped 31 percent to $12.7 billion; non-interest costs increased 15 percent to $10.1 billion. Return on equity–which measures how effectively profit is reinvested–dropped to 11.1 percent for 2007 from 16.3 percent in 2006.During the housing slump, both Wachovia and Bank of America reported their lowest quarterly profits in at least six years. Damaged by the subprime mortgage collapse, the largest banks and brokerages have posted writedowns and credit losses of more than $120 billion since June.