Share sale boosts Bank of America

Bank of America Corp, the biggest US bank by assets, raised about $13.5 billion by selling new shares after US regulators determined it needed more cash to weather the economic condition. ┬á The Charlotte, North Carolina- bases company issued 1.25 billion shares at around $10.77 each, according to a statement yesterday, and plans to boost common equity capital by $17 billion through the sale of stock and converting preferred shares mostly held by institutional investors, chief executive officer Kenneth Lewis said earlier this month. ┬á Lewis was told by US regulators that he needs to raise $33.9 billion, and took advantage of a 40 percent increase in Bank of AmericaÔÇÖs market value during the past month to bolster capital. Wells Fargo & Co. and Morgan Stanley were the first banks to respond to the governmentÔÇÖs stress tests when they sold a combined $16.6 billion of stock and bonds on May 8. ┬á The bank said it expects to add another $10 billion of capital through asset sales and at least $7 billion from an improvement in pretax profits, but the figures may change as the company considers options to achieve its $33.9 billion target, spokesman Jerry Dubrowski said in a phone interview. ┬á ÔÇ£We are comfortable with our current capital position in the present economic environment,ÔÇØ Lewis said at the time. ÔÇ£The stress test asks what if the economy does much worse than most experts project.ÔÇØ ┬á Analysts at Goldman Sachs Group Inc. raised their investment rating on Bank of America this week to ÔÇ£buyÔÇØ from ÔÇ£neutral,ÔÇØ saying the company may earn 25 cents a share in the second quarter. ┬á ÔÇ£The worst is over for Bank of America and it will have absolutely no problem raising more capital,ÔÇØ said Kim Yong Tae, head of overseas investment at Yurie Asset Management Inc. in Seoul. ÔÇ£The minute the US government started pumping taxpayer money into lenders its financial-system risks started easing, and are now completely gone.ÔÇØ