Reuters reported on Friday that Bank of America was considering additional assets to boost regulatory Tier 1 capital. The recently announced that its moves to issue new common while retiring preferred shares and long-term debt would increase its Tier 1 capital by $3.9 billion.
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Based on a 16-cent quarterly payout, the shares have a dividend yield of 4.95%, which is a very aggressive payout for the company, which is trying to leverage excess capital.People's United was included among TheStreet's 10 Large Banks With Very Strong Capital, with a Sept. 30 Tier 1 common equity ratio of 15.00%, according to SNL. The shares look expensive in the current environment, trading for 1.5 times tangible book value and 15 times the consensus 2012 EPS estimate of 85 cents, among analysts polled by FactSet. Interested in more on People's United Financial? See TheStreet Ratings' report card for this stock. Shares of MetLife (MET - Get Report) rose only slightly to close at $31.20, even though the life insurer took a major step as part of its plan to lose its designation as a bank holding company, through its deal to sell most of its MetLife Bank subsidiary to General Electric (GE) unit GE Capital. While the deal certainly looks like a good one for both companies, since GE Capital is looking to expand its deposit base and MetLife's banking business provides such a small boost to its revenue, it appears that even after MetLife completes its exit from the banking business by selling its mortgage origination operations, the company will still face Federal Reserve scrutiny, as outlined in the regulators proposed rules to strengthen its oversight of large banks and other "systemically important" financial services companies.
Philip van Doorn. To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.