Bank of America hasn't changed dividend philosophy

NEW YORK (Reuters) - Bank of America Corp (BAC.N) Chief Executive Kenneth Lewis said on Monday the second-largest U.S. bank has not changed its philosophy about its dividend, but will do what is prudent in light of market conditions.

The 64 cent per share dividend equated to a 6.64 percent dividend yield as of Friday, higher than at many rivals. Several large U.S. lenders have lowered their dividends this year, including Citigroup Inc (C.N), Wachovia Corp WB.N, Washington Mutual Inc (WM.N) and National City Corp NCC.N.

"We have not changed our philosophy about the dividend," Lewis said on a conference call, after the bank posted a 77 percent drop in first-quarter profit.

He said, however, that if the U.S. economy worsened dramatically, perhaps sinking into a long recession, "we would do what we think prudent to manage capital."

Lewis also said Bank of America plans to return to its targeted 8 percent Tier-1 capital ratio through "earnings generation and no share repurchases," and the bank maintains an "abundance of liquidity." The Tier-1 ratio ended March at 7.51 percent, the bank said.

(Reporting by Jonathan Stempel, editing by Gerald E. McCormick)