INSTANT VIEW: Bank of America posts $1 billion loss

NEW YORK (Reuters) - Bank of America Corp on Friday posted its second quarterly loss in less than a year, as it suffered from consumer credit losses.

The nation's largest bank reported a net loss of $1 billion, or $0.26 per share in third quarter 2009, compared with net income of $1.18 billion, or $0.15 per share, over the same period last year at the height of the financial crisis.

The following is reaction from industry analysts and investors:

MALCOLM POLLEY, STEWART CAPITAL ADVISORS, IN INDIANA, PENNSYLVANIA

"Bank of America has a huge credit card portfolio, which will impact them. Consumers aren't spending, and unemployment is rising, so that puts pressure on the consumer credit side. People have been looking at the commercial real estate part of the portfolio for banks, and while that will be a problem, it's not nearly the problem that consumer credit is. For credit card loans, there is no collateral, so your losses are going to be high. Bank of America could continue to suffer for awhile."

GARY TOWNSEND, CHIEF EXECUTIVE, HILL TOWNSEND CAPITAL IN CHEVY CHASE, MARYLAND

"It's not a very good report. Not only have they missed the top line and the bottom line, although they're saying that credit deterioration has slowed, I noticed that net-interest income is down sequentially again. It's a function I believe of the continued increase in non-performing assets -- any revenues from those they can't include in net-interest income, so we see some net-interest margin compression too. The adverse credit picture continues to weigh on the firm and there's really a poor earnings prospect until they can turn that around."

"Bank of America is not going to fail. It's eventually going to turn this around -- but it will take time. Whoever comes in after Lewis, presumably someone from the outside, will end up taking over the firm probably at exactly the right moment when combined with an improving economy he will look heroic, whether he is or not."

MICHAEL HOLLAND, PRESIDENT, HOLLAND & CO, NEW YORK

"There's a lot of noise in these earnings, with all the mark-to-markets and other items. With Ken Lewis leaving, there is some cleaning of the decks for the next skipper to come on board."

WILLIAM SMITH, CHIEF EXECUTIVE OFFICER OF SMITH ASSET MANAGEMENT, NEW YORK:

"What jumps out at me is the writedowns from their narrowing credit spreads. So $2.6 billion is from that. The song remains the same-you have strong capital markets activity from the investment bank, and higher deterioration in consumer credit quality. But the results appear pretty solid. You're going to get to a point where you get to a tipping point in consumer credit where you're overreserved. Then as unemployment comes down, which it will sooner or later, they'll reverse these credit reserves, and it will be billions of dollars of provisions being reversed flowing through to the income statement."

HANS-JUERGEN DELP, CHIEF STRATEGIST AT COMMERZBANK, FRANKFURT

"With Intel, we have experienced great euphoria at the beginning of the week and JPMorgan has clearly pushed expectations much higher. This is why Goldman and Citi failed despite better-than-expected results yesterday. Investors had secretly hoped for even higher figures and this is also why Bank of America disappoints so much. Although it is still very early into earnings season, we're seeing that the positive momentum is rapidly diminishing."

PHILIP LAWLOR, CHIEF PORTFOLIO STRATEGIST AT NOMURA, LONDON

"There is a bit of a story with the banks that possibly JPMorgan set the hurdle rate very high, and at the margin it's difficult for the banks -- you saw it with Goldmans yesterday -- to now come in and have the same type of positive reaction."

"For the broader market, I think we've almost got to put the banks aside. Yes they've dominated the newsflow this week but once they're out of the way we're getting back to Main Street, and the newsflow from Main Street is going to be very focused on the guidance, certainly in terms of top-line revenue growth."

BERNARD MCALINDEN, MARKET STRATEGIST AT NCB STOCKBROKERS, IRELAND

"What the market is sensitive to is the extent to which credit quality is deteriorating, anything it sees in Bank of America's results about that could have the market worried."

WESTON BOONE, MANAGING DIRECTOR OF BLOCK TRADING AT STIFEL NICOLAUS CAPITAL MARKETS IN BALTIMORE

"The knee-jerk reaction was to knock the stock down 3 percent on light volume, but I don't think it looks as bad as the market is painting it out to be. Their provisioning is down $1.7 billion, and they're making comments about leveling in card delinquencies.

"What you want to focus on is credit trends. This is the largest bank in the country, its a money center, and its more leveraged to the consumer than its peers. One of the positives is the chatter coming from management that they're seeing a leveling in delinquencies and card portfolios. Also, if you look at the third-quarter provision, that's down $1.7 percent. That one of the first things that jumps out at me and the my initial read is that this might not be as bad as expected from the knee-jerk reaction."

(Reporting by Ryan Vlastelica, Elinor Comlay and Dan Wilchins in New York, Christoph Steitz in Frankfurt and Joanne Frearson and Tricia Wright in London)