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BOA considers more asset sales to boost capital

Written by David Mitchell|Tuesday, 27 December 2011 06:33

According to the sources BOA is behind in the race of its major U.S. competitors in applying the new capital rules that would lead the bank to consider even more asset sales. The bank's organization is paying attention on not being an outlier compared to its peers and believes it has 'feasible option' to increase its capital levels, a person familiar with the situation told.

For example, the bank could think over selling its Indian back-office processing operation, as other banks did and moreover the bank is looking to get rid of its real estate holdings and private-equity investments. But after the huge asset sales worth $ 50 billion since January 2010 which include sales such as most of its shares in China Construction Bank Corp, the bank may not have many big-ticket items left. One of the bank analyst said that the BOA might require a sum of $45 billion by the year 2019 to overcome and cut down most of its franchises.

More sales of assets!!
According to the sources BOA is behind in the race of its major U.S. competitors in applying the new capital rules that would lead the bank to consider even more asset sales.

That would mean shedding more significant businesses, such as parts of the investment bank or the Merrill Lynch brokerage. The bank can also perk up its capital measures by retaining profits and running off perilous loans, but those steps might surely take time.
The bank declined to pass any statement on its specific asset sales. The question of how much assets the second-biggest U.S. bank will eventually need to lift is a key concern that is clattering investors. Bank of America, which had to be bailed out by the U.S. government during the financial crisis of 2008, has remained one of the weakest in the industry.

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