BofA Dividend Unchanged Despite Passing Fed Stress Test

Bank of America

shareholders will receive a 1 cent dividend this year, despite the bank passing a federal stress test earlier this year that would have allowed it to boost the payout. The dividend will be payable July 25 to shareholders as of July 11 according to a press release issued yesterday. The company has paid a 1c quarterly dividend every quarter since the beginning of 2009 according to its website. Earlier last year Bank of America, the second largest US bank in terms of assets, had spoken about a dividend increase, then in March 2011 the Federal Reserve rejected the Charlotte, North Carolina-based bank's dividend increase plan. This year in March the bank passed the test in which the Federal Reserve evaluated what would happen to the bank if unemployment rose to 13%, the stock market decreased by half and housing values decreased 21%. JPMorgan Chase

passed the stress test in 2011 and rose its dividend from 5 cents to 25 cents, and rose payouts again earlier this year to 30 cents according to its website. US Bancorp (NYSE USB) passed the stress test in 2011 and rose its dividend from 5 cents to 12.5 cents last year and again earlier this year to 19.5 cents. Bank of America earned a net income of $1.4 billion in 2011, 1 cent per share, after reporting a net loss of $2.2 billion in 2010, according to a press release issued in January. Most of the revenue was earned in the fourth quarter, when the bank posted earnings of $2 billion, 15 cents per share. The company's most profitable division was card services, reversing 2010's net loss of $7 billion to earn $5.8 billion in 2011. The company will release its first quarter 2012 financial results April 19. Bank of America

also restructured its business divisions as part of Chief Executive Officer Brian Moynihan's “New BAC” program to return the bank to higher profitability according to an SEC filing issued yesterday. The program, announced last year, was set to reduce expenses by $5 billion and cut 30,000 jobs. The bank combined its deposit, business banking and card services segments into a “Consumer and Business Banking” division. Commercial banking and corporate and investment banking were combined into a “Global Commercial Banking” division and “Global Markets” are now their own division. Joseph Price, the former head of consumer, small business and card banking, and Sallie Krawcheck, former head of global wealth management, left those positions in September to be replaced by co-Chief Operating Officers Thomas Montag and David Darnell.