Bank of America CEO says could repay TARP in '09: report
NEW YORK |
NEW YORK (Reuters) - Bank of America Corp (BAC.N) Chairman and Chief Executive Kenneth Lewis said the largest U.S. bank could repay the $45 billion of government capital it has taken by late 2009 or early 2010, depending on the economy, according to an interview published in the Charlotte Observer.
The bank could repay the infusion now, Lewis said, if it were not maintaining higher-than-normal capital to account for the "fragile" state of the financial system. He also expects the Charlotte, North Carolina-based lender to be profitable in 2009 absent an "unexpected meltdown."
Lewis made his comments in an interview on Tuesday. Five days earlier, he had said Bank of America was profitable in January and February, after the chief executives of JPMorgan Chase & Co (JPM.N) and Citigroup Inc (C.N) made similar comments. These outlooks contributed to broad gains in U.S. stocks over the last week-and-a-half.
Some critics have called for Lewis' removal as a result of Bank of America's troubled January 1 acquisition of Merrill Lynch & Co. This led to a government bailout that included a $20 billion infusion from the Troubled Asset Relief Program, on top of $25 billion earlier, and a loss-sharing agreement on $118 billion of assets. Lewis became chief executive in 2001.
In the interview, Lewis said that three years and more from now, Merrill "will prove to be one of the best acquisitions we've ever made." He said the bank has made about one-fourth of a planned 35,000 job cuts related to the purchase, and expects 45 percent of overall cost savings in 2009.
Lewis said his job status did not come up at a January board meeting. He turns 62 next month, and said he expects to remain chief executive at least until the bank repays the government and makes $30 billion a year after taxes. "I would think that 2011 could be the year that you have a shot at doing that," he said.
Separately, Lewis again said there have been no talks and there is no need to nationalize Bank of America. He declined to discuss New York Attorney General Andrew Cuomo's lawsuit over $3.62 billion of bonuses paid hurriedly in late 2008 to Merrill employees. Merrill lost $15.84 billion in the fourth quarter.
Analysts on average expect 2009 profit of 50 cents per share at Bank of America, according to Reuters Estimates.
Bank of America shares closed Tuesday at $6.27. They traded at $33.74 before the Merrill merger was announced last September 15, and subsequently fell as low as $2.53 on February 20.
(Reporting by Jonathan Stempel, editing by Dave Zimmerman)
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