Bank of America Corp.'s investment banking executive said Wednesday that loan losses from homebuilders and other borrowers will probably deepen in the third quarter.
Brian Moynihan, speaking at a financial services conference in New York, said loans to homebuilders and other industries related to residential real estate were his division's main source of problem assets. “It's not pretty,” he said, but added, “this is not a number that creates major pain for us.”
Moynihan, the president of global corporate and investment banking, noted that Bank of America is exposed to the struggling auto industry in the Midwest, due to its purchase of LaSalle Bank. He said he expects his division to invest in more international ventures, such as European health care, and to increase its presence in equity markets and mergers and acquisitions.
His division has cut 3,400 jobs, or 15 percent of its positions, since October.
The conference was hosted by Lehman Brothers, which that same day reported a dismal quarterly loss and said it might put itself up for sale.