Bank of America Suspends Buyback and Dividend Increase

Bank of Numpty land more likely. Who cant make the cut now?


A Bank of America branch in New York.    Spencer Platt/Getty Images

The New York Times
DealB%k
By Michael Corkery
28 April 2014

Bank of America said on Monday that it was suspending its share buyback program and a planned increase in its dividend after it discovered flaws in the information it submitted to the Federal Reserve as part of the stress test process.

In a statement, the bank attributed the error to an incorrect adjustment related to the treatment of structured notes assumed in its acquisition of Merrill Lynch in 2009. As a result of the error, the bank said, its capital levels are lower than what it had disclosed to the Fed.

After the bank notified the Federal Reserve of the mistake, the Fed “is requiring the Bank of America Corporation to resubmit its capital plan and to suspend planned increases in capital distributions,” it said in a statement.

“The Federal Reserve can require a banking organization that is part of the annual Comprehensive Capital Analysis and Review (CCAR) program to resubmit its capital plan at any time if there is a material change that could potentially lead to an alteration in a firm’s capital position,” the statement said. “Bank of America must address the quantitative errors in its regulatory capital calculations as part of the resubmission and must undertake a review of its regulatory capital reporting to help ensure there are no further errors.”

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