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Bank of America cuts dividends and raises capital

The Sydney News.Net
Tuesday 7th October, 2008

The Bank of America, the largest US bank, has put forward a plan to raise $10bn in capital and halve its dividend.

Bank of America executives say they have decided to raise capital to higher levels to ride out the economic crisis.

Bank of America says it will cut its dividend by half to 32 cents, giving it an extra $1.4bn in capital each quarter.

However, the bank is still highly profitable, even though reported third quarter earnings are $1.2 billion; a third of the level of a year ago.

Ken Lewis, Bank of America chief executive, has said “These are the most difficult times for financial institutions that I have experienced in my 39 years of banking.”

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