This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Bank of America Mulls Dividend Hike

Stocks in this article: BAC JPM WFC

CHARLOTTE, N.C. ( TheStreet) -- Bank of America (BAC) CEO Brian Moynihan says the firm is planning to raise its dividend to a "reasonable" level within the next couple of years.

However, the process will begin only as soon as regulators outline "phase-in" periods for new capital standards.

>>>Bank Dividends May See Regulatory Stall

Banks must maintain at least an 8% ratio of top-quality capital to risk-weighted assets under new capital standards outlined by the international Basel Committee on Banking Supervision. For Bank of America, this Tier 1 common ratio stood at 8.45% as of Sept. 30.

During a conference call on Tuesday, Moynihan indicated that Bank of America "should run on 8.5 to 9%" without a problem as Basel and other U.S. regulations are implemented. But Ed Najarian, an analyst with ISI Group, questioned management's assumptions - saying it didn't seem as though a dividend was factored in before 2013.

"I wouldn't assume that," said Moynihan. "We didn't mean to create that impression...Embedded in here is a reasonable dividend policy."

Moynihan said management is simply waiting to get a clear policy from regulators regarding the timing of various new rules. In addition to the new Basel Accord - which clearly spells out requirements and timing - U.S. regulators are also figuring out how and when to implement "market risk" capital requirements as well as other parts of the Dodd-Frank financial reform bill.

"The regulators have been clear that they understand from you as investors that there has to be a sharing of this capital as we build it up, and the idea was to build it up across time," said Moynihan.

Other big banks like JPMorgan Chase (JPM) and Wells Fargo (WFC) have been eager to boost dividends as well, but held back by the same regulatory uncertainty.

Bank of America is paying just a penny per share quarterly, down from 64 cents in mid-2008 and 32 cents by the end of that year. Wells' dividend is now 5 cents per share each quarter, vs. a 34-cent payout through early 2009.

JPMorgan cut its dividend to 5 cents per share from 38 cents per share in early 2009. Last week, JPMorgan CEO Jamie Dimon indicated that his bank may boost dividends as early as the first quarter of 2011. Dimon has said in the past that he'd like to restoring a 30% to 40% payout ratio as soon as possible.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs