"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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV