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Share sale helps Bank of America | Share sale helps Bank of America |
(about 10 hours later) | |
Bank of America has raised $13.5bn (£8.7bn) through selling new shares as it looks to strengthen its financial position during the economic downturn. | Bank of America has raised $13.5bn (£8.7bn) through selling new shares as it looks to strengthen its financial position during the economic downturn. |
The bank was told by the US government earlier this month that it needed to raise $33.9bn - more than any other US bank - in order to weather the crisis. | The bank was told by the US government earlier this month that it needed to raise $33.9bn - more than any other US bank - in order to weather the crisis. |
It has issued 1.25 billion shares at an average price of $10.77, slightly below the open market share price on Tuesday. | It has issued 1.25 billion shares at an average price of $10.77, slightly below the open market share price on Tuesday. |
Other US banks are in the process of raising cash by issuing new shares. | Other US banks are in the process of raising cash by issuing new shares. |
'Slow recovery' | |
Separately, Bank of America chief Ken Lewis told a conference in London that he expects more consolidation among US banks as the economy stabilises. | |
However, he said his own bank would not be party to any more takeovers following the acquisition of Merrill Lynch in January. | |
"We have enough on our hands right now," he said. | |
Mr Lewis also expressed a belief that the US economy was beginning to pick up. | |
"We are on the cusp of what will turn out to be a slow but sustainable economic recovery. There will continue to be a lot of pain... but I think the worst is most likely behind us," he said. | |
Earlier this month, the US Treasury undertook a series of so-called "stress tests" on 19 of the country's biggest banks to see if they had sufficient capital to cope should the recession deepen. | Earlier this month, the US Treasury undertook a series of so-called "stress tests" on 19 of the country's biggest banks to see if they had sufficient capital to cope should the recession deepen. |
It concluded that 10 banks needed to raise $74.6bn in new funds. | It concluded that 10 banks needed to raise $74.6bn in new funds. |
The banks were given until 8 June to finalise their plans to do so, and get them approved by regulators. | The banks were given until 8 June to finalise their plans to do so, and get them approved by regulators. |
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