Bank of America, the best performer in the Dow Jones Industrial Average for 2012, has more than doubled since the start of the year as the company rebuilds capital and investor confidence.
Bloomberg reports that Bank of America climbed 1.4% to $11.15 at 10:33 a.m. in New York Tuesday, bringing its advance for this year to 101%. The second-largest U.S. lender by assets has more than quadrupled since February 2009 when the stock sold for $2.53 during the credit crisis amid speculation it would be nationalized.
CEO Brian T. Moynihan has targeted $8bn in annual cost cuts and is boosting capital at the Charlotte, North Carolina-based firm, in part by selling more than $60bn in assets since he took over in 2010. Moynihan said December 4th he’s confident Bank of America will pass the next round of U.S. stress tests, a move that could open the way for a higher dividend or share buybacks.
'Given the improvement in Bank of America’s capital ratios over the past year we now believe it is highly likely that it will return capital in 2013', Richard Staite, an analyst with Atlantic Equities LLP, said in a December 13th note. Excess capital will 'reduce the perception of risk', making the company 'our top pick among U.S. banks', he wrote.
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