BankAmerica Issues Update on Effects of Market Conditions.SAN FRANCISCO--(BUSINESS WIRE)--Sept. 15, 1998--BankAmerica Corporation today announced that turbulent conditions in global markets are continuing to have negative impacts on quarterly income. Nevertheless, BankAmerica said that its consumer business trends remain solid and the company expects to report an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. profit, excluding merger-related charges, in excess of $500 million for the third quarter of 1998. The bank said that as a result of market volatility it has lost approximately $330 million in non-interest trading income in the quarter to date (including the impact of the previously announced trading losses The following contains a list of trading losses which eventually forced major corporations to go bankrupt or restructure parts of their organisation. This list is not exhaustive. ). This compares with non-interest trading income of $119 million in the second quarter of 1998 and $251 million in the first quarter of 1998. Market turbulence turbulence, state of violent or agitated behavior in a fluid. Turbulent behavior is characteristic of systems of large numbers of particles, and its unpredictability and randomness has long thwarted attempts to fully understand it, even with such powerful tools as has also affected the company's non-interest income from equity investment activities. Non-interest income from equity investment activities totaled $30 million in July and August compared to $125 million in the second quarter of 1998. Net-interest income has also been negatively affected by volatile market conditions, primarily affecting income from purchasing and carrying securities. Interest income from purchasing and carrying securities recorded a loss of $12 million in July and August, compared to a gain of $53 million in the second quarter of 1998. This decline was primarily attributable to one borrower where BankAmerica's relationship included a yield enhancement entitling BankAmerica to a 50 percent share of net profits. BankAmerica said that its loan loss experience is expected to be in line with recent quarters. The company's credit losses are expected to total approximately $270 million in the third quarter. Credit losses were $230 million in the second quarter of this year and $259 million in the third quarter of last year. As previously announced, BankAmerica is expected to close its sale of BA Housing Services to Greenpoint Financial this quarter, resulting in an expected pre-tax gain of $480 million. The bank also expects to take a charge of approximately $200 million primarily as a result of a write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of its investment in KorAm Bank in South Korea and other charges. BankAmerica management reiterated its strong support for its scheduled merger with NationsBank Corporation which will be voted upon by shareholders of both companies on September 24. The company noted that market conditions remain volatile and these results are subject to change. BankAmerica said the forgoing for·go also fore·go tr.v. for·went , for·gone , for·go·ing, for·goes To abstain from; relinquish: unwilling to forgo dessert. contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. conveying management's expectations as to the future. These statements are subject to uncertainties, including those discussed in the "Forward-Looking Statements" in BankAmerica's most recent report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , that may cause actual results to differ materially. Investors are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . CONTACT: BankAmerica Corporation John Keane John Keane is the name of:
Mike Zampa, 415/622-4524 |
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