Bank of America Corp (NYSE: BAC)’s preferred stock has been given an investment grade rating by Fitch, citing the Charlotte-based bank’s ability to boost common equity and liquidity as well as improving asset quality in the company’s loan portfolios.
Fitch cited Bank of America Corp (NYSE: BAC)’s capital raising efforts and the company’s Tier 1 common capital ratio of 8%, up from 6.9% earlier in the year. Fitch said in a statement that, “Capacity to pay preferred dividends is significantly stronger, given the emergence of core profitability and far lower preferred dividend payments versus peak levels.” The firm noted that preferred dividend costs are now about $300 million per quarter, down from $1.4 billion in Q1 2009.
The rating company said that Bank of America Corp (NYSE: BAC) still has a high level of nonperforming loans and risk from mortgage repurchases and legal risk related to its acquisitions of Merrill Lynch and Countrywide Financial, however, it said that the bank’s total loan loss provisions could fall as the company’s loan quality improves.
Bank of America Corporation is a bank holding company, and a financial holding company. The Company is a financial institution, serving individual consumers, small and middle market businesses, large corporations and governments with a range of banking, investing, asset management and other financial and risk management products and services. Through its banking subsidiaries (the Banks) and various nonbanking subsidiaries throughout the United States and in selected international markets, it provides a range of banking and nonbanking financial services and products through six business segments: Deposits, Global Card Services, Home Loans & Insurance, Global Banking, Global Markets, Global Wealth & Investment Management (GWIM), with the remaining operations recorded in All Other. On January 1, 2009, the Company completed the acquisition of Merrill Lynch.
Shares of Bank of America Corp (NYSE: BAC) traded down 1.15% on Friday ending the week at $12.87.
