Bank of America will continue share buybacks, CEO says

FILE PHOTO: Brian Moynihan, Chairman of the Board and CEO of Bank of America Corporation attends the World Economic Forum (WEF) annual meeting in Davos, Switzerland January 20, 2017. REUTERS/Ruben Sprich

(Reuters) - Bank of America Corp BAC.N will continue to favor share buybacks over a dividend increase to avoid putting itself in a position where it may have to reduce the dividend in the future, Chief Executive Brian Moynihan said at a conference in London on Wednesday.

“Our stock’s a good buy and we’ll continue to buy it until the cows come home,” he said.

While not explicitly stated in any rule, regulators have made it clear to banks that their dividend payout should not exceed 30 percent of earnings.

Bank of America expects to return $14.2 billion to shareholders in 2017, with the majority of that coming via share buybacks, according to a presentation earlier this month by Chief Financial Officer Paul Donofrio. That compares to $6.6 billion in 2016.

Bank of America shares were up 2.2 percent in early trading on Wednesday.

Reporting by Dan Freed in New York; Editing by Meredith Mazzilli