In November Bank of America executivesestimated pretax CDO write-downs of at least $3 billion.
The nation's largest retail bank and credit-card issuer recorded net income of $268 million, or five cents a share, compared with $5.26 billion, or $1.16 a share a year earlier. The company in December warned that earnings would be "disappointing," though it did expect to be profitable.
In addition to the write-downs, the company recorded $400 million losses to support certain cash funds and recorded subsequent write-downs of $400 million on securities purchased from the funds at fair value. The company said equity investment income fell $750 million "due to few opportunities for gains in the current markets."
Net revenue dropped 31% to $12.67 billion.
"Our fourth-quarter results were severely impacted by ongoing dislocations in capital markets and the slowing economy," said Chairman and Chief Executive Kenneth Lewis. "Even given that environment, we certainly are not pleased with our performance. However, we are cautiously optimistic about 2008, though we believe economic growth will be anemic at best in the first half."