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Bank of America profits decline One-time gain bolsters Citigroup
(30 minutes later)
Bank of America (BoA) has reported a 5.5% fall in quarterly profits as customers fell behind with credit card and mortgage payments. Citigroup and Bank of America have reported better-than-expected quarterly profits, but both warned that losses on consumer loans were likely to continue.
It said net profit totalled $3.2bn (£2bn) in the April to June quarter compared with $3.4bn a year earlier. Citigroup made $4.28bn in the April-to-June quarter after a loss of $2.5bn a year earlier, helped by a one-off gain.
Bank of America said its profits slid 5.5% as customers fell behind with credit card and mortgage payments.
BoA and Citigroup's corporate report cards follow forecast-beating earnings from Goldman Sachs and JP Morgan.
Citigroup profits were boosted by a one-off gain of $11.1bn from the sale of its Smith Barney brokerage, but warned its core banking operation still faced problems.
"Our most significant challenge now remains consumer credit," said Citigroup chief executive Vikram Pandit.
"Losses in our consumer businesses have been growing for some time, but we see some positive signs of moderation in those loss trends," he added.
Citigroup has received a $45bn bail-out from the US government.
'Difficult challenges'
BoA said net profit totalled $3.2bn (£2bn) in the April-to-June quarter, compared with $3.4bn a year earlier.
But the fall was much less than Wall Street analysts had expected, helped by strong gains in trading fees.But the fall was much less than Wall Street analysts had expected, helped by strong gains in trading fees.
BoA's corporate report card follows better-than-expected earnings from Goldman Sachs and JP Morgan.
BoA chief executive Kenneth Lewis warned that the bank was not yet out of the woods.BoA chief executive Kenneth Lewis warned that the bank was not yet out of the woods.
"Difficult challenges lie ahead from continued weakness in the global economy, rising unemployment and deteriorating credit quality," Mr Lewis said."Difficult challenges lie ahead from continued weakness in the global economy, rising unemployment and deteriorating credit quality," Mr Lewis said.
Bank of America took over investment bank Merrill Lynch at the height of the financial crisis last October and was bailed out by the US government.Bank of America took over investment bank Merrill Lynch at the height of the financial crisis last October and was bailed out by the US government.
The bank was told by the US government earlier this year that it needed to raise $33.9bn - more than any other US bank - in order to weather the crisis.The bank was told by the US government earlier this year that it needed to raise $33.9bn - more than any other US bank - in order to weather the crisis.