In the quarter, Global Corporate and Investment Banking posted net revenue loss of $781 million versus revenue of $5.15 billion previously. The division reported a net loss of $2.76 billion compared with net income of $1.39 billion in the year ago quarter.

Net revenue in Global Wealth and Investment Management gained 8%, as asset management fees rose to a record $3.53 billion. For the unit, Net income declined 6%, as non-interest expense rose 20% due, amongst other factors, the addition of U.S. Trust.

Equity investment income fell $750 million due to fewer opportunities for gains in the current markets.

Income from other business units gained 95% to $2.92 billion from $1.50 billion a year earlier.

Credit costs rose in the fourth quarter, as credit quality indicators deteriorated from favorable levels experienced in 2006. Weakness in the housing and financial markets resulted in rising credit risk in some portfolios, particularly home equity, homebuilders and small business.

Earnings Guidance

BAC chairman and chief executive, Kenneth D. Lewis said, “we are certainly not pleased with our performance” and guided that in 2008, the firm will be cautious, in a slowing in economy.

He said: “However, we are cautiously optimistic about 2008, though we believe economic growth will be anemic at best in the first half.”

BAC expects that the inclusion of new acquisitions, U.S. Trust and LaSalle Bank will drive future profitability, as well as the introduction of new products. No Fee Mortgage Plus, a new product introduced in the fourth quarter, contributed 16% of $104 billion earned from first mortgage originations.

Analysts polled by Thomson Financial estimate that earnings in the current quarter at $1.04 per share on revenues of $18.30 billion.

Shares of BAC fell $0.95 or 2.64% to $35.06 in mid-morning trade Tuesday. Over the past 52 weeks, the stock has traded in the range $35.13 and $54.21. Analysts are now targeting a one-year price of $46.88.

Business Review

The financial industry has been hit hard by losses, as a result of bad loans linked to the subprime mortgage market.

Giant banking groups, Merrill Lynch, Bear Stearns, Citigroup, Goldman Sachs, Lehman Brothers amongst others have since reported huge losses to the credit crisis. The losses now top $100 billion. Several institutions have forecast a difficult 2008.