Rochdale Securities financial analyst Richard Bove spoke with FOX Business Network (FBN) about Berkshire Hathaway CEO Warren Buffett’s $5 billion investment in Bank of America (BAC, Financial). He said, “I personally thought that was the biggest rip-off of Bank of America shareholders you can imagine.” Excerpts from the report are below.
On how much Warren Buffett’s $5 billion Bank of America (BAC) investment had to do with the Federal Reserve perceiving the bank as a company that has more strength on its balance sheet:
“I personally thought that was the biggest rip-off of Bank of America shareholders you can imagine. It was not right; it was the wrong thing for them to do. I think what the Fed is looking at is the raw numbers. The raw numbers will tell you that Bank of America has roughly about $360 billion in cash and government backed securities. What the raw numbers tell you, these companies have cash, have capital, are seeing deposits increase, are seeing loans increase and are seeing bad loans go down and coming close to record earnings…At some point the market has to recognize that.”
On if Bank of America will raise its dividend next year:
“Bank of America has already indicated they did not request an increase in dividends this time around and I believe they will request it in January of next year when they do the next stress test.”
On if Bank of America will announce buybacks in 2012
“I don’t think so.”
**CREDIT: FOX BUSINESS NETWORK**
On how much Warren Buffett’s $5 billion Bank of America (BAC) investment had to do with the Federal Reserve perceiving the bank as a company that has more strength on its balance sheet:
“I personally thought that was the biggest rip-off of Bank of America shareholders you can imagine. It was not right; it was the wrong thing for them to do. I think what the Fed is looking at is the raw numbers. The raw numbers will tell you that Bank of America has roughly about $360 billion in cash and government backed securities. What the raw numbers tell you, these companies have cash, have capital, are seeing deposits increase, are seeing loans increase and are seeing bad loans go down and coming close to record earnings…At some point the market has to recognize that.”
On if Bank of America will raise its dividend next year:
“Bank of America has already indicated they did not request an increase in dividends this time around and I believe they will request it in January of next year when they do the next stress test.”
On if Bank of America will announce buybacks in 2012
“I don’t think so.”
**CREDIT: FOX BUSINESS NETWORK**
