Bank of America said Monday that its profit plummeted 77 percent during the first quarter of the year to $1.21 billion amid trading losses and as it boosted reserves for potential credit shortfalls. Bank of America's profits shrunk dramatically from $5.26 billion in the same quarter a year earlier when US financial markets were in much better shape. America's largest banking group by market worth saw its earnings per share tumble to 23 cents during the first three months of this year, marking an 80 percent slide from the same quarter of 2007. The bank's earnings per share disappointed most Wall Street analysts who had predicted Bank of America would reap 41 cents per share. “Despite revenue growth in most of our businesses, these results clearly did not meet our expectations,” Bank of America's chairman and chief executive Kenneth Lewis said. Overall revenues moderated seven percent to $17 billion during the first quarter compared with $18.2 billion in the same period of 2007. “The weakness in the economy and prolonged disruptions in the capital markets took their toll on our performance,” the bank's CEO said. Trading-related losses amounting to 1.31 billion dollars took a big bite out of the financial giant's earnings while it said it had hiked its reserves to cover possible credit problems to $6.01 billion. Lewis gave a cautionary outlook for coming months, especially as the US economy continues to be buffeted by a persistent housing slump, a related credit squeeze and rising job cuts. “We remain concerned about the health of the consumer given the prolonged housing slump,” he said, adding that first quarter US growth is expected to be “minimal at best.” Like many rival banks, Bank of America has been battling to weather the housing and credit woes which have ravaged the US financial sector heavily in the past 10 months. __
