In a securities filing today, Bank of America (NYSE:BAC) talked about the cost of the British tax on bank bonuses and what it would cost them, along with their exposure to the Greece sovereign debt crisis.
Concerning the British tax on banking bonuses, Bank of America said they estimate it may cost them close to $465 million in the second quarter, which would have a significant impact on their earnings.
For the quarter ending June 30, the company said they plan on recording a compensation expense as a result of the tax, which is a one-time 50 percent tax on bonuses paid from December 9, 2009 to April 5, 2010.
For their exposure to the Greek sovereign debt crisis, BofA said they have about $193 million a risk in government-backed debt in the country. Even so, that could be limited because of credit default protection of $205 million.
Taking the entirety of the five countries under financial stress in Europe – Portugal, Ireland, Italy, Greece and Spain – their total exposure is $3.1 billion to government debt, with an equal amount of credit default protection to back them up.
Their major concern is Italy, where exposure is $2.3 billion to government-backed debt, and private debt is a gigantic $7.3 billion, according to the filing.
Bank of America said through a spokesman that they believe the debt is very “manageable.”
