Banking giant Bank of America
The results came amid a $5.3 billion writedown as the bank continued to struggle with subprime-related toxic debt. The company's corporate and investment banking units took the brunt of it, with those particular divisions coughing up a $2.7 billion loss on the quarter.
Nonetheless, the declines came across a wide swath of the bank's segments. Everything from small-business lending to wealth management posted significant pull-backs compared to a year ago.
While still ugly at best, B of A's performance for the quarter ranks near the top of its peers. In recent weeks, banking giants such as Citigroup
On top of the troubling times, Bank of America recently agreed to purchase mortgage giant Countrywide Financial
Furthermore, Bank of America announced this morning it would cut its prime rate -- or the rate charged to clients with the highest credit quality -- from 7.25% to 6.50%. The cut came after the Federal Reserve lowered interest rates unexpectedly by three-quarters of a point, its largest one-time cut in several years. Lower interest rates make it more affordable for consumers and corporations to borrow money and finance growth.
Going forward, investors will likely look toward the financial sector for guidance on the state of the economy. As the financial sector purges out bad debt caused by the real estate boom, only time will tell when banks can get back on their feet and resume business as usual, fueling the pockets of consumers and corporations around the world.
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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. He appreciates your questions, comments, and complaints. The Fool's disclosure policy is all about investors writing for investors.