New York: Bank of America Corp said it would raise its quarterly dividend for the first time in seven years, after the Federal Reserve approved the bank’s updated capital plan.
Bank of America’s shares rose as much as 2.4 percent after the bank said it would increase its quarterly dividend to 5 cents per shares from 1 cent per share.
The updated capital plan included an increase in common stock dividend but no share repurchases, the second-largest US bank said in a statement.
The bank withdrew in April its previous capital plan, which also included a plan to buy back $4bn of shares, after it found errors that reduced a key capital level.
The accounting error stemmed from Merrill Lynch & Co’s debt, which Bank of America assumed after it bought the investment bank and brokerage during the financial crisis. Bank of America’s payout will increase by $1.68bn per year based on the number of outstanding shares as of July 28.
Raising the dividend has been a top priority for CEO Brian Moynihan. Prior to the 2008 financial crisis, the bank paid a quarterly dividend of as much as 64 cents per share.
Reuters
