Author Topic: Attention: Bank of America Aid Will Be Similiar to Citi's: Sources (Read 1410 times)

~PunjabiKudi~ · « **on:** January 15, 2009, 04:33:37 PM »

Government officials are discussing a new aid package for Bank of America that would be similiar to the financial lifeline given to Citigroup in November, CNBC has learned.
The Citigroup rescue involved both a fresh capital infusion and government backing of billions in risky assets held by the bank.
While the size of the added capital injection isn't known, the government is considering guaranteeing between $100 billion and $200 billion of Bank of America's risky debt, sources said. The guarantee would invlove the Federal Reserve and the FDIC along with the Treasury, these sources said.
So far, Bank of America has received a total of $25 billion in capital from the $700 billion Wall Street bailout fund, known as TARP. That includes $10 billion for Merrill Lynch, which Bank of America bought in a deal that closed Jan. 1.
Bank of America, the largest U.S. bank, is seeking billions of dollars of new aid after realizing that credit losses at Merrill Lynch were much higher than expected. That spurred Bank of America to start talking to the Treasury in mid-December, the Wall Street Journal reported.
The terms of the government aid are still being finalized, and details are expected to be announced with Bank of America's fourth-quarter earnings, due out January 20.
Bank of America stock [BAC 8.32 -1.88 (-18.43%) ] plunged to an 18-year low on Thursday on news that it would need more bailout money. Citigroup [C 3.83 -0.70 (-15.45%) ] also skidded further on worries that government efforts to shore up the bank's capital still wouldn't be enough.
Bank of America's perceived need for government aid raised questions about whether Chief Executive Kenneth Lewis overreached by swallowing Merrill and Countrywide Financial Corp, the largest U.S. mortgage lender, which the bank bought in July.
Those acquisitions propelled Bank of America into becoming the largest U.S. bank, with tentacles throughout the financial system just as the economy was heading south.
Bank of America now looks more like the "financial supermarket'' model that Citigroup once aspired to and may now be preparing to abandon.
Bank of America did not take government help to buy Merrill and Countrywide, and Lewis was hailed as a savior for a troubled banking industry when the mergers were announced.
But many analysts now expect Bank of America to lower its quarterly dividend again, after halving it to 32 cents a share in October.
The purchase price for Merrill was $19.4 billion, based on reported shares, while Countrywide cost $2.5 billion.
"There is fear in the market that they bit off more than they could chew,'' said Bill Hackney, managing partner of Atlanta Capital Management.

Punjabi Janta Forums - Janta Di Pasand · « **on:** January 15, 2009, 04:33:37 PM »

ਅਮਨ ਪੰਨੂ · « **Reply #1 on:** January 15, 2009, 05:43:54 PM »

yaar barhe garak hoiya piya Market da ajj kal ta..... mainu samajh nai aunda ki banno lokka da.......

Pυηנαвι Sιηgн Sσσямα · « **Reply #2 on:** January 16, 2009, 12:04:05 AM »

sahi gal a economy da bura haal a
SaÃ°e states wang ehna bad nahi ga

Author Topic: Attention: Bank of America Aid Will Be Similiar to Citi's: Sources (Read 1410 times)

~PunjabiKudi~

Attention: Bank of America Aid Will Be Similiar to Citi's: Sources

Punjabi Janta Forums - Janta Di Pasand

Attention: Bank of America Aid Will Be Similiar to Citi's: Sources

ਅਮਨ ਪੰਨੂ

Re: Attention: Bank of America Aid Will Be Similiar to Citi's: Sources

Pυηנαвι Sιηgн Sσσямα

Re: Attention: Bank of America Aid Will Be Similiar to Citi's: Sources

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