Share sale aids BoA to speed TARP payback

BANK of America (BoA) moved halfway to finding the $33.9bn (£21.9bn) the US government has demanded it raise yesterday as it said it had sold $13.4bn worth of shares since Friday.

America’s largest bank said in a statement after the closing bell that it had sold 1.25bn common shares at an average price of $10.77 as part of a planned stock offering.

The US government has told the bank that it needs to raise $33.9bn to plug the gap in its capital base, following stress-testing by regulators.

It must do this before paying back the $45bn bailout money it received under the Troubled Asset Relief Programme (TARP).

The proceeds of the share sale, combined with the sale last week of a $7.3bn stake in China Construction Bank, puts the bank well on the way to raising the required funds at a much faster rate than expected.

BoA will now turn to further asset disposals, the conversion of preference shares and group earnings to raise the additional cash.

Raising the funds quickly will help ease the pressure on chief executive Kenneth Lewis, who has already been ousted as chairman and is facing calls to step down from the bank’s board altogether.