Bank of America, one of the two largest recipients of US government bailout money, said last night that it was close to repaying all $45bn (£27bn) it was lent by the taxpayer.
The company is planning an $18.8bn share sale to help fund the repayments, which could be completed within days. Ken Lewis, who was forced to plan early retirement amidst shareholder fury over the bailout, said: "We appreciate the critical role that the US government played last autumn in helping to stabilise financial markets and we are pleased to be able to fully repay the investment, with interest." He leaves at the end of this month.
BofA borrowed an initial $25bn from the US Treasury at the height of the 2008 financial panic, and needed $20bn more to plug deepening losses at Merrill Lynch, the investment bank it acquired on the weekend that Lehman Brothers went bust.
The bailout money came with obligations to submit to government oversight of BofA's executive salaries and bonuses. The bank will not be immediately clear of those obligations, since it does not propose yet to buy back warrants issued to the government.
Also last night, BofA said it had agreed to sell $4bn of assets before the middle of next year to help rebuild its balance sheet.Reuse content