Writedowns of $3.62 billion in the credit book were attributed specifically to "significant home price declines and the slowing economy [leading to] credit deterioaration in the domestic consumer, small business and homebuilder portfolios."
A further $1.22 billion in further non-credit writedowns were ascribed to "market deterioration" but again represented an imporvement on $2.81 billion in non-credit charge-offs for the first quarter.
Although strongest results were derived from Bank of America's retail business units, the much-maligned investment banking division - which BoA appeared to be stepping away from following chief executive Ken Lewis' now-infamous admission last October that he had had "all the fun I can stand" in the sector - actually saw profits improve in the second quarter compared with 2007.
Global Corporate and Investment Banking brought in $1.74 billion between April and June, up from $1.69 billion in the same period the previous year.
"The fact that we can absorb $3.6 billion in credit losses, take $1.2 billion losses in additional writedowns, add $2.2 billion to our allowance for credit losses, and still earn $3.4 billion dollars should tell investors something about the extent and consistency of our earnings power," said Lewis on an earnings call.
Lewis also sought to scotch rumours regarding BoA's July 2007 purchase of Countrywide Financial, the largest servicer of subprime mortgages in the US prior to its acquistion. Despite racking up a $2.33 billion loss for the second quarter, the bank insists Countrywide "immediately adds to Bank of America profit," and is expective to be accretive by the end of 2008.
See also: BNP Paribas to purchase Bank of America prime brokerage arm
$6bn in Q4 writedowns at Bank of America and Wachovia
The US' largest commercial bank and second largest institution by capitalisation saw profits decline dramatically from the $5.76 billion recorded for the second quarter of 2007, but improve markedly on the dissapointing $1.21 billion in income for the first three months of 2008.