Bank of America has posted its biggest quarterly loss after approving an $8.5billion settlement linked to sub-prime mortgages. The US’s largest bank made a loss of $8.8billion in the three months to the end of June, lower than forecasters had expected.
Included in the losses are expenses to shareholders and insurers, and charges for future claims over home loans .
The bank’s profits for the quarter were $13.2bn, down 55% from a year ago.
On 29 June, Bank of America announced it would take a series of one-off charges after private shareholders demanded the bank contract giving the sellers security toxic home loans held in mortgage-backed securities.
The investors claimed Bank of America’s home loans division used ambiguous information when it sold mortgage-backed securities that later fail to pay during the global financial crisis.
Apart from the charges, analysts predict the Bank of America hub operations were making progress.