JUST THE START --- BankAmerica posts big Russian losses
SAN FRANCISCO (Reuters) - BankAmerica Corp. Friday became the latest major U.S. bank to fall victim to the Russian financial crisis, saying it had incurred trading losses of $220 million so far this quarter, mostly in Russia.
A company spokeswoman told Reuters the losses would not affect the bank's proposed $60 billion merger with NationsBank Corp., which was conditionally approved by the Federal Reserve earlier this month.
On Thursday, Republic New York Corp. (RNB - news) said losses on its Russian investments would force it to take a charge of $110 million in its third quarter, substantially wiping out its earnings for the period.
BankAmerica said its losses included net interest income associated with the company's currency, stocks and bond trading activities. BankAmerica said it reduced its total exposure in Russia from $412 million on June 30 to about $100 million on Aug. 26.
The bank's exposure included cross-border loans, local currency and foreign assets.
A company spokeswoman declined to comment on the effect of the loss on BankAmerica's current third-quarter earnings, or to speculate about the economic catastrophe in Russia.
''The situation is fairly in flux right now,'' she said.
BankAmerica is the fifth largest U.S. bank with second-quarter assets of $263.89 billion. Merged operations with NationsBank would make BankAmerica the biggest bank holding company in the United States and the third largest in the world.
A spokesman for NationsBank, which agreed to merge with BankAmerica earlier this year, confirmed the deal is on and said it has no exposure to the overseas markets that caused BankAmerica to divulge the heavy trading losses Friday.
BankAmerica stock fell 37.5 cents to $73.375, while NationsBank was unchanged at $65, both in composite New York Stock Exchange trading. Republic New York dropped $3.06 to $42.44, also on the NYSE. |
