Bank of America CEO Sees 6 Percent Charge-Off Rate in Credit Cards

Bank of America CEO Ken Lewis said on a conference call Monday that he expects rising losses in the company’s consumer credit business for the rest of the year.

Speaking on an investor conference call sponsored by Deutsche Bank Securities, Lewis said credit card charge-offs "could be slightly above 6 percent in the next quarter or two.” He also expects losses in Bank of America’s home equity portfolio to be above 2 percent.

Lewis noted that Charlotte-based Bank of America, the second-largest bank in the U.S., is “in a nasty cycle of building reserves at the same time charge offs are rising.” Lewis acknowledged that losses in its consumer credit unit will impact earnings for the company.

Lewis also reiterated that the bank’s planned acquisition of embattled mortgage lender Countrywide Financial is a good deal, even as the housing market plummets in the U.S. He said that his company expects housing to turn around by the beginning of next year and that Countrywide would give the bank access to a market – residential mortgage lending – that it has targeted for growth.

Bank of America announced last week that Barbara Desoer, who has been Chief Technology and Operations Officer, will now be president of the consumer real estate operations of Countrywide and Bank of America when they are combined.