Bank ea­ger to raise div­i­dend: BofA

The Pak Banker - - Company& -

NORTH CAROLINA: Bank of Amer­ica Corp will raise its div­i­dend as soon as pos­si­ble next year if it passes the cur­rent Fed­eral Re­serve stress test, Chief Ex­ec­u­tive Brian Moyni­han said.

Moyni­han, speak­ing at the Gold­man Sachs U.S. Fi­nan­cial Ser­vices Con­fer­ence in New York, said the bank is tar­get­ing a div­i­dend to share­hold­ers of 30 per­cent of earn­ings, with the re­main­ing 70 per­cent used to but­tress the bank's cap­i­tal.

He said the bank wants to raise the div­i­dend as soon as pos­si­ble. "I don't see any­thing that would stop us," he said.

The 19 largest U.S. banks are un­der­go­ing a Fed stress test to see whether their bal­ance sheets are strong enough to ab­sorb var­i­ous eco­nomic shocks. The U.S. cen­tral bank will not al­low len­ders' to in­crease div­i­dends un­less they pass the stress test. Bank of Amer­ica, the largest U.S. bank by as­sets, slashed its div­i­dend to 1 cent per share in the 2009 first quar­ter af­ter re­ceiv­ing $45 bil­lion in U.S. govern­ment bailout aid. Be­fore than, it paid 32 cents per share. Moyni­han said he re­gret­ted the bank's con­tin­u­a­tion of div­i­dend pay­ments as the fi­nan­cial cri­sis wors­ened and peaked in 2008. Bank of Amer­ica paid $15 bil­lion in div­i­dends dur­ing a pe­riod when it was post­ing "neg­a­tive cash flow," he said. "I would love to have that cap­i­tal back," Moyni­han said, not­ing the cap­i­tal-rais­ing the bank has done since then has been more ex­pen­sive than if it had just slashed the div­i­dend ear­lier. BofA's div­i­dend in­creased to 64 cents per share in Septem­ber 2007, just as sub­prime mort­gage prob­lems be­gan to sur­face in the U.S. hous­ing in­dus­try. -PB News

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.