* Moynihan says bank wants dividend at 30 pct of earnings
* Bank must get Fed approval before increasing payout
* Shares fractionally lower
(Adds more comments from Moynihan, background, byline)
By Joe Rauch
CHARLOTTE, N.C., Dec 7 Bank of America Corp
(BAC.N) will raise its dividend as soon as possible next year
if it passes the current Federal Reserve stress test, Chief
Executive Brian Moynihan said on Tuesday.
Moynihan, speaking at the Goldman Sachs U.S. Financial
Services Conference in New York, said the bank is targeting a
dividend to shareholders of 30 percent of earnings, with the
remaining 70 percent used to buttress the bank's capital.
He said the bank wants to raise the dividend as soon as
possible. "I don't see anything that would stop us," he said.
The 19 largest U.S. banks are undergoing a Fed stress test
to see whether their balance sheets are strong enough to absorb
various economic shocks. The U.S. central bank will not allow
lenders' to increase dividends unless they pass the stress
Bank of America, the largest U.S. bank by assets, slashed
its dividend to 1 cent per share in the 2009 first quarter
after receiving $45 billion in U.S. government bailout aid.
Before than, it paid 32 cents per share.
Moynihan said he regretted the bank's continuation of
dividend payments as the financial crisis worsened and peaked
Bank of America paid $15 billion in dividends during a
period when it was posting "negative cash flow," he said.
"I would love to have that capital back," Moynihan said,
noting the capital-raising the bank has done since then has
been more expensive than if it had just slashed the dividend
BofA's dividend increased to 64 cents per share in
September 2007, just as subprime mortgage problems began to
surface in the U.S. housing industry. It was cut to 32 cents in
December 2008 as the global financial crisis was at its apex.
Charlotte, North Caroline-based Bank of America is now
focused on paying dividends after ensuring it has enough
capital to absorb losses and meet new regulatory rules,
BofA shares were off 9 cents at $11.55 in morning trading
on the New York Stock Exchange.
(Reporting by Joe Rauch; editing by Dave Zimmerman and John