NEW YORK (Reuters) - Bank of America Corp posted a second quarter loss, after taking more than $20 billion of mortgage-linked charges.
The following are comments from analysts and investors:
DAVID DIETZE, CHIEF INVESTMENT OFFICER OF POINT VIEW FINANCIAL SERVICES, SUMMIT, NEW JERSEY:
“There is a little bit more optimism today than there was 24 hours ago with respect to any kind of a capital raise.”
“It’s a slow grind for them. It’s like the Cold War and it’s going to take a while to get a peace dividend. It will take a year or two for them to slog through Countrywide, and the fact that they never really managed the strategy more cohesively penalizes them under Basel 3 (capital rules).
They’ve got to let (the overhang of bad mortgage loans) roll off, run off, get charged off or sold, and that takes a long time.
Will they raise the dividend? Maybe in 2012, but who knows. We’ve got to see more progress. Management is going to have to jump a lot of hoops.”
MATT MCCORMICK, PORTFOLIO MANAGER AT BAHL & GAYNOR INVESTMENT COUNSEL INC. IN CINCINNATI:
“The pre-release took a lot of thunder out of today’s release, and there’s no real surprise. It’s a noisy quarter. I still feel that the stock has considerable headwinds ahead of it. It may be up today with the broader market but they still have substantial housing risks and regulatory issues in front of them. Until those are resolved and until they get a strong dividend policy I’m not going to sharpen my pencil quite yet.”
RICK MECKLER, PRESIDENT OF LIBERTYVIEW CAPITAL MANAGEMENT IN JERSEY CITY:
“The stock was reacting as if there was some sort of upcoming doomsday announcement and I don’t think that is reflected in the numbers. It seems to indicate a bank that is making its way back but is still hampered by its mortgage problems. It was not as negative as people had priced the stock for. It indicates there is some stability below the surface of this bank.”
ANDREA JAO, FINANCIAL INSTITUTIONS TRADING DESK ANALYST AT COWEN & CO IN NEW YORK:
“Bank of America’s results are in line with the pre-announced number and in line with general trends.
Yesterday the stock came down a bit more than the general market, reflecting continuous concerns, especially in terms of the mortgage business. During the conference call, market participants (will) pay special attention to that business and any indication of continuing charges.
The results aren’t bad at all.”
CORT GWON, CHIEF STRATEGIST, HUDSONVIEW CAPITAL MANAGEMENT IN NEW YORK:
“This is in line with expectations, the big concern was that they were going to have more write-offs than anticipated from the settlement. But if they can put the settlement behind them, they should do well, especially with the yield curve steepening a little.”
Reporting by Ryan Vlastelica, David Henry, Aleksandra Michalska, compiled by Knut Engelmann