Bank of America is almost to the finish line as it seeks to raise the almost $34 billion that regulators demanded last month.
In an announcement Tuesday morning, the Charlotte bank said it has raised almost $33 billion, and now expects to "comfortably exceed" regulators' demands.
The bank has been laying out plans to raise common equity since May 7, when regulators released the results of stress tests of the 19 biggest banks. The government decided that Bank of America needed more common capital to withstand a worse-than-expected recession. The bank has moved far more quickly than required. The government had given the bank a month to come up with a plan, and another six months — till Nov. 9 — to actually raise the money.
Tuesday, chief financial officer Joe Price said the bank was pleased "to have nearly reached our goal this quickly." The majority of the money raised, the bank said, will be used “to reduce reliance on government support for the company.”
Bank of America is eager to repay the $45 billion it has borrowed from the government's Troubled Asset Relief Program, or TARP. The pressure to repay could be more acute right now because the Federal Reserve is supposed to begin announcing next week which big banks have received approval to repay TARP. Banks such as J.P. Morgan Chase and BB&T could likely be in the first wave, since they were not required to raise extra capital after the stress tests.
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