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Citing a weakening worldwide economy, Bank of America Corp. today 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. 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. Purchase volume on BofA debit cards was $55.16 billion, up 1.6% from $54.27 billion. BofA reported it had a total of 18,426 ATMs in operation at the end of June, down slightly from 18,531 a year earlier. During a conference call this morning with analysts, Joe L. Price, BofA chief financial officer, noted that during the quarter BofA added 611,000 new consumer and small-business credit card accounts, representing a total of $4.2 billion in new credit lines extended to customers. "Even though the economy is contracted, we continue to add new (credit card) accounts," Price said, adding that although charge-offs continue to rise over year-ago levels, overall BofA is seeing a slowing in credit deterioration.

 

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