"Any future subsidiary sales would not be to satisfy the TARP requirements. Bank of America has a specific strategy to streamline its model, and I would expect them to sell more," said Jefferson Harralson, an analyst at Keefe, Bruyette & Woods.
The Charlotte, NC-based institution received $45 billion in assistance through the U.S. Treasury Department's Troubled Asset Relief Program (TARP) following the 2008 financial crisis. According to published reports last week, Bank of America told regulators that it will meet the final conditions of its TARP repayment by year's end.
"They had to raise enough assets to pay back TARP and the company will continue to sell to raise capital," said Paul Miller, analyst for FBR Capital Markets. "I think they are under a couple different pressures between shareholders and the regulatory environment and this would cause them to really sell as much as they could. I think they are selling everything at a discount."Just during the third quarter of this year BofA has done several sales, including:
- The sale of the company's preferred and common shares of Itaú Unibanco Holding S.A., which generated a $1.2 billion pretax gain.
- The sale of the company's equity position in MasterCard, resulting in a pretax gain of approximately $440 million.
- An agreement to sell the company's entire 24.9 percent stake in Grupo Financiero Santander, S.A.B. de C.V. back to an affiliate of its parent company, Banco Santander (STD), in a private transaction for $2.5 billion which generated a pretax loss of $428 million.
- The sale of Columbia Management's long-term asset management business, which generated a $60 million pretax gain and resulted in a reduction in goodwill and intangibles of approximately $800 million.
- An agreement to sell a $1.9 billion portfolio of limited partnership interests in private equity funds to AXA Private Equity at a pretax loss of approximately $160 million.