By Joe Rauch
CHARLOTTE (Reuters) - Bank of America Corp posted a wider-than-expected quarterly loss as improvement in its Merrill Lynch investment banking unit failed to offset consumer credit woes.
The nation's largest bank reported a net loss of $1 billion, or 26 cents per share, for the third quarter, compared with net income of $1.18 billion, or 15 cents per share, in the same period last year at the height of the financial crisis.
Analysts' average forecast was a loss of 21 cents per share, according to 15 analysts polled by Thomson Reuters I/B/E/S.
Expenses grew at a faster rate than revenue during the quarter, the Charlotte, North Carolina-based bank said.
Revenue, net of interest expense, increased 32 percent to $26.4 billion, while noninterest expenses climbed 39 percent to $16.3 billion, due largely to higher personnel costs.
The bank set aside $11.7 billion during the quarter for credit losses, $1.7 billion less than in the second quarter but $5.3 billion more than in the 2008 third quarter.
Bank of America said that while those reserves and credit losses are still high, the growth is slowing. U.S. consumers compromise roughly 60 percent of the bank's loan portfolio, from home mortgages to credit cards.
Nonperforming assets climbed to $33.8 billion in the third quarter from $31 billion in the second quarter, slower quarter-over-quarter growth than in previous periods in the economic downturn.
Merrill Lynch made a positive contribution to overall results, the bank said.
Noninterest income spiked to $14.6 billion from $8 billion a year earlier, due largely due to the addition of Merrill Lynch's brokerage and investment banking businesses.
Bank of America last posted a quarterly loss in the 2008 fourth quarter. It was the company's first quarterly loss in 17 years.
Bank of America shares were down 3.3 percent to $17.50 in premarket trading. The shares rose 29 percent during third quarter, keeping pacing with the broader KBW Banks Index, but are still down 23 percent over the past 12 months.
(Reporting by Joe Rauch; editing by John Wallace)
