(Xinhua)
Updated: 2008-01-23 13:43

WASHINGTON - Bank of America and Wachovia, two largest banks in the United States on Tuesday reported sharp drops in profits for the fourth quarter of 2007.

A Wachovia branch in McLean, Virginia, in a file photo. As more banks report write-downs tied to the global credit crunch, analysts say Wachovia may have losses lurking in an area that has garnered less investor attention. [Agencies]

The Charlotte, North Carolina-based Bank of America, the nation's second-largest bank, said its net income plunged by 95 percent to 268 million dollars, or 5 cents per share, in the final three months of last year, from 5.26 billion dollars, or 1.16 dollars per share, a year ago.

Its revenue fell to 12.67 billion dollars in the quarter, down 31 percent from the year-earlier level of 18.49 billion dollars, according to a press release.

Analysts had been expecting the earnings of 18 cents per share on revenue of 13.24 billion dollars for the bank. The fourth-quarter results reflected a 5.28 billion  dollar write-down related to collateralized debt obligations, a mortgage-backed debt.

"Our fourth results were severely impacted by ongoing dislocations in capital markets and the slowing economy," said Kenneth D. Lewis, chairman and chief executive officer.

"Even given that environment, we certainly are not pleased with our performance," Lewis said. "However, we are cautiously optimistic about 2008, though we believe economic growth will be anemic at best in the first half."

For all of last year, Bank of America posted net income of 14.98 billion dollars, or 3.30 dollars per share, compared with 21.13 billion dollars, or 4.59 dollars per share, in 2006.

Wachovia, also based in Charlotte, North Carolina, said its fourth-quarter profit plummeted 98 percent to 51 million dollars, or 3 cents per share, from 2.3 billion dollars, or 1.20 dollars per share, in the same period of 2006.

The nation's fourth-largest bank took a write-down of 1.7 billion dollars in the quarter due to weakening credit markets, according to a press release.

For the full year of 2007, Wachovia earned 6.31 billion dollars, or 3.31 dollars per share, down 19 percent from the earnings of 7.79 billion dollars, or 4.72 per share, in 2006.