Regulators have told Bank of America that the company needs to raise roughly $35 billion in capital based on results of the government’s stress tests, according to people familiar with the situation.
The exact amount of the needed infusion couldn’t be determined late Tuesday, and Bank of America officials either declined to comment or couldn’t be reached.
— Advertisement —
Comments (36)
Leave a comment
You can log in with your account or comment as a guest below.
- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
Put Ken in some fishnets and a wig and make him start turning tricks.
As a former BAC associate in Charlotte who now lives in Canada, I’m laughing my maple syrup ass off! Hey Ken, whatta ya gonna do this time? Jack up card services rates to avg. 300% ?? Tear down employee morale even more so you can pay NC minimum wages? I’m sorry for my friends who still work in this crap hole of a bank, but my time is done!
That tag is so fucking perfect. Bess, you know your sounds.
Not meaning to be a complete fuck, because I feel for the MER peeps…but this made me laugh out loud.
“The bank already is hunting for a buyer for the First Republic banking unit acquired as part of the Merrill purchase, and is considering selling asset-management unit Columbia Management. Sales of those two operations could generate about $4 billion, according to David Hendler, an analyst at CreditSights Inc.”
I think I’m not the only one that needs a refill on the georgi and blue-raspberry slurpee.
I left in 2004 after 6 years of I-banking hours and commecial banking pay. It was the best decision I’ve ever made.
For those still at BAC the decision is now more complex. Leave for a new opportunity to continue your greedy, antisocial ways, or stay, and help promote harmony, providing low interest loans to union-owned, US based businesses?
Now Ken Lewis will be able to devote adequate time to answering interrogatories and appearing at depositions.
“We’re not happy about it because it’s still a big number,” Mr. Alphin said. “We think it should be a bit less at the end of the day.”
Hmm, so if it’s “a bit less” it’s no longer a “big number”?
Don’t tell this guy is next in line for the CEO job
Hottest new music video – “I Don’t Want You BAC.”
http://www.youtube.com/watch?v=8tVMQVAhzyY
Typos are courtesy of the NYT. Someone must have typed that one out in a hurry.
“If Bank of America relied on that conversion for the majority of the capital it needs to maintain, the govnerment wouildj become the nbakjn’s controlling shareholder.”
http://www.nytimes.com/2009/05/06/business/06stress.html?ref=business
Needing only $5 billion to $10 billion in capital is the new killing it.
NYT:
“Citigroup, the largest and most deeply troubled of the banks, is expected to need to raise capital as insurance against any further downturn in the economy. The government told the bank it would need $50 to $55 billion in capital, a requirement that would force it to raise $5 billion to $10 billion in new capital, according to people briefed on the final results. Citigroup executives say the bank can easily cover any shortfall, and is considering several options to close that gap.”
Didn’t some guy on television say that none of these guys are going out of business cause the government said they are backstopping them and that this is all baked into the stock price? Or did I have wax in my ears?
So, do we now know which are the two banks that failed the stress test? Because, you see, I am shocked! Shocked!
@8, ummm… thanks for the video link, but that guy’s voice is enough to make me slit my wrists. Maybe you should sent it to K-L?
I am the CEO of a major U.S. Bank.
What is “solvency”?
spinning off Merrill via an IPO should net them about 35 big ones
So when BoA spokesperson said they are not looking to raise 10bln.. it was because it was 35bln.. how is somebody not in jail for willful deception?
can’t wait to see Wells Fargo capital requirements due to the “asinine” stress test..
If by “big ones” you mean foot-long hot dogs, then yes.
@17, right on
Selling off john thain’s office furniture should close most of the gap
ask obama he is all about change
why are the spin-meisters at bofa trying to say this is a positive? this is great – they are saying that $35 bn means they can give back the other $10 bn they took under tarp. please…ken step away from the punchbowl.
bess, tag is great, but you should have added “I repeat, nothing is fk’d”…
Rock on. BAC will be up 15% today!
and why are they letting the head of HR making these comments?
Surprise surprise the Gov’t changes the rules on the banks in the middle of the game. Now its all about TCE not Tier 1.
Still, thats no excuse for the way BofA management has handled this. If they convert this preferred to equity and massively dilute shareholders Ken Lewis has to leave, although management will try to argue its not a new capital injection.
@10 – c already accepted its fate by arranging to convert their pfds. kenny boy bit off more than he could chew talking about paying back tarp. I believe his original comment was to be interpreted that he would pay it back without converting the outstanding pfds. at least he can stick to his guns because he was so vague – but vague isn’t new at bofa…
@23 – good question, perhaps wideclops already took care of the pr dept.
http://dealbreaker.com/2009/01/bank-of-americas-no-2-likens-f.php#more
Need we say more? This is the guy who called a press conference the second BofA exceeded Citi market cap, only to go back to #2 in the middle of it.
@20 – awesome.
Glad I got out of that stupid place..now if I could only offload the shares I own…
I’m not sure who’s buying, but BAC is actually up in the pre-market…
Seems like cnbc whrs are being paid to say how $55B isn’t the number and how incredibly easy it will be to get 10-15B of perferred converted. and so on. blah blah blah.
$35bil>$10bil that is good news right?
Banks are like municipal bonds – it doesn’t matter what happens, the government can always just tax constituents more.
Obama in his efforts to outdo Stalin has every incentive in the world to keep forcing banks to raise capital. It’s his primary method of confiscation.
Why would anybody keep their assets with a publicly traded bank now? You really want the IRS printing your monthly statements?
@32
as usual, a total brainless contribution
@33 yep.
@33
thanks pal – i’m here for you
BofA needs to get their Tier 1 up and then need to get it up fast
Just because I didn’t go to Wharten doesn’t mean I don’t understand finance
The Guy From Delaware