Bank of America Corp. last week announced its global card services business lost $1.62 billion during the second quarter ended June 30.
The unit generated net income of $582 million during the same period a year ago. Total revenues net of interest expense during the quarter were $7.34 billion, down 2.1% from $7.5 billion, which BofA attributed to lower fee income.
In response to deteriorating economic conditions and a rising level of bankruptcies, the company said it increased its provision for credit card loan losses to $7.74 billion, up 81.7% from $4.26 billion a year ago. The issuer charged off 11.73% of net managed card receivables, up sharply from 5.96% a year earlier.
Joe L. Price, BofA chief financial officer, noted during a conference call with analysts that although charge-offs continue to rise over year-ago levels, overall BofA is seeing a slowing in credit deterioration.
BofA managed an average of $172.59 billion in credit card loans during the quarter, down 7% from $185.66 billion. Credit card purchase volume was $51.94 billion, down 19.4% from $64.46 billion.