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BofA mulls more asset sales to boost capital
December 27, 2011
Bank of America is considering more asset sales, sources say, as it lags behind its major U.S. competitors in complying with new capital rules. The bank's management is focused on not being an outlier compared to its peers and believes it has "viable alternatives" to increase its capital levels, a person familiar with the situation told Reuters. The bank might for example consider selling its Indian back-office processing operation, as other banks have, sources said. The bank has also said it is looking to shed real estate holdings and private-equity investments.
But after about $50 billion of asset sales since January 2010, which include sales such as most of its shares in China Construction Bank Corp the bank may not have many big-ticket items left.
According to one anaylyst the bank may need $45 billion of additional capital by 2019, it may have to start cutting deeper into its franchise. That would mean shedding more significant businesses, such as parts of the investment bank or the Merrill Lynch brokerage. The bank can also improve its capital measures by retaining profits and running off risky loans, but those steps will take time.
The bank declined to comment on specific asset sales. For more info go to, [Reuters 12/26/11]

