Angry protesters set the scene for the Bank of America’s annual meeting at their headquarters in Charlotte, N.C. Shareholders were eager to tell CEO, Brian Moynihan, about the disastrous effect foreclosure has had on their communities.
Losses due to foreclosures and their associated costs have affected the banks’ profits for several quarters, and were responsible for a 39% loss of income during the first quarter of this year. Figures show that residential and commercial customers with $24 billion worth of loans were late by 90 days or more, and the bank already owns $2 billion of foreclosed properties.
Moynihan tried his best to reassure shareholders with a tale of two banks; one consisting of the mortgage business and the other being made up of other business concerns. It doesn’t exactly make a reassuring story as the bank is amongst the worst performers of the S&P 500 index this year, and was the only large bank out of the big four to fail the Federal Reserve stress test.
One shareholder, Michael Garland, who was there representing the New York City Comptroller’s Office, as well as several large public pension funds had written to the bank requesting an independent review of foreclosures and mortgages, to ensure that all conform to current laws. He didn’t receive a reply until five days before the meeting. The New York Comptroller’s Office had also proposed that the bank conduct an independent review at the shareholders meeting, but failed to get enough votes to force the bank to comply.
Still at least the shareholders were sitting comfortably on plush red velvet seats, as the meeting was held in the brand new auditorium in recently opened 32-storey Bank of America Tower.