CHARLOTTE -- Bank of America, the nation's largest bank, intends to severely limit its exposure to emerging markets this year, the company's chief financial officer said Tuesday.
The comments from Jim Hance to analysts came on the same day that BankAmerica Corp. reported a fourth-quarter loss of 15 cents a share. The loss was blamed on the costs of the merger of NationsBank and BankAmerica as well as losses from a hedge fund.
Hance told The Charlotte Observer the company also continues to closely monitor events and borrowers in Brazil, where government officials decided last week to devalue their nation's currency, causing turbulence in securities markets.
Bank of America plans to cut in half its emerging markets exposure -- or the amount of securities and loans it holds in such markets as Brazil, Russia and other developing economies, Hance said in the company's earnings conference.
A bank spokesman noted that Hance also said it was not certain the company can reach that goal.
Meanwhile, the bank reported the costs from the Sept. 30 merger were $441 million, while losses from investments by D.E. Shaw totaled $43 million during the quarter.
Fourth quarter earnings totaled $1.16 billion, or 66 cents a share, compared to $1.46 billion, or 81 cents a share, for the previous fourth quarter.
Net income for the year also showed a loss -- $5.17 billion, or $2.90 a share, compared to $6.54 billion, or $3.61 a share, for 1997, the bank reported.
"We enter 1999 with renewed momentum, having rebounded from the third quarter," said Hugh L. McColl, Jr., BankAmerica chairman and chief executive officer.
"The major components of our business are reporting solid results. Our challenge now is to unlock the huge potential of the unmatched growth franchise we have built."
The company said it significantly reduced its exposure to D.E. Shaw during the quarter and sharply cut losses from Shaw's investments below the third quarter levels.
The company acquired a $20 billion fixed-income portfolio and related hedge positions from Shaw, effective October 7, 1998. More than $13 billion of that portfolio was liquidated. Another $6 billion was absorbed into the company's trading portfolio because the securities met the bank's portfolio requirements, BankAmerica said.
The bank said it now considers those investments part of its operations and does not anticipate reporting on them separately in the future.