"We have reached the amount of capital we need to run this company," Moynihan said in a speech at a Goldman Sachs conference.
Moynihan also appears to have intended to say the bank plans to raise the dividend next year above its token level of a penny per share. Asked by a Goldman analyst if the bank would raise its dividend next year, Moynihan appeared to say,
"I don't see anything that would stop us from not being successful."While that translates to "we won't be successful," a Bank of America spokesman said Moynihan actually meant a dividend increase was likely. "I thought he said he didn't see anything that would stop us from being successful, meaning he would expect a reinstatement of the dividend sometime in 2011," wrote spokesman Jerry Dubrowski in an email exchange. Moynihan said he expects to institute a normalized shareholder payout ratio of 30% of earnings, which is well below previous levels. Bank of America paid out 73% of earnings in dividends in 2007, and between 46-47% from 2004-2006, according to Federal Reserve data provided by SNL Financial. Moynihan said he believes Bank of America was too aggressive with dividend payouts in 2007-2008. "We paid dividends too long in the cycle. I'd love to have that capital back." Carole Berger, analyst with Luna Analytics, argued on Monday Bank of America won't be returning capital to shareholders "in any significant amount" until 2012 or 2013. Several banks are expected to boost dividends well ahead of Bank of America, including Wells Fargo (WFC), US Bancorp (USB), JPMorgan Chase (JPM), PNC Financial (PNC), State Street Corp. (STT)and Bank of New York Mellon (BK).