Bank of America Says It's Ready to Exit TARP Bank of America (BAC) has told U.S. regulators that it has met the final condition that was set on its plan to exit the government's Troubled Asset Relief Program, the Financial Times reported Monday.

BofA, which repaid $45 billion in TARP funds in December 2009, needed to raise $3 billion in capital and record the gains by the end of this year. Regulators intend that money to help build the bank's equity, giving it a stronger footing after it leaves the TARP.

If Bank of America, the biggest U.S. bank, fails to satisfy the Federal Reserve Board that it has added enough cash to its books through asset sales, it will have to issue additional common shares, diluting its per-share earnings.

BofA told the Fed that recent moves would bring the bank close to the $3 billion requirement, FT sources said. The moves include selling 43.6 million shares of BlackRock (BLK). BofA became BlackRock's largest stakeholder after acquiring Merrill Lynch during the financial crisis. The bank also sold its right to buy 1.79 million shares in China Construction Bank.

The remainder of the $3 billion is expected to derive from tax gains related to holding a smaller slice of BlackRock, the sources added. Another option, as the bank mentioned in its third-quarter filing, would be to issue stock to certain employees in lieu of year-end cash awards.

Increase your money and finance knowledge from home

Understanding Stock Market Indexes

What does it mean when people say "the market is up 2%"?

View Course »

Reading a Stock Quote

Learn to read the ingredients of a stock.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

If you are in trouble or even if your not in trouble with your mortgage you Need to see these videos ... talk about an eye opening ... sit back and try to relax (but you won't be able to). Bring a paper and pencil and listen closely for it will Blow you Away. Talk about banks with skeletons in their closets they don't want you to know about.

December 16 2010 at 12:10 PM Report abuse rate up rate down Reply

when the banks are giving mortgage rates down 2-3%,why are they allowed to take down the interest rates from the public to pay for it?

December 06 2010 at 8:30 PM Report abuse rate up rate down Reply

No wonder they are foreclosing on EVERYONE...

December 06 2010 at 1:59 PM Report abuse +1 rate up rate down Reply
1 reply to sunsetroxx's comment

Yeah, banks make lots of money off foreclosures. That's why their stocks when up so much during 2008-2009.

December 06 2010 at 2:03 PM Report abuse +2 rate up rate down Reply