Bank of America maintains dividend
Shareholders to receive a penny a share even after the bank passes a test that was expected to boost payout.
Bank of America (BAC) shareholders will continue to receive a quarterly dividend of a penny a share, despite the bank passing a federal stress test earlier this year that would have allowed it to boost the payout.
The dividend will be payable July 25 to shareholders as of July 11, according to the bank.
The company has paid a 1 cent dividend every quarter since the beginning of 2009, according to its website. Bank of America, the second-largest U.S. bank by assets, had spoken about a dividend increase, but its plans to do so were rejected last year by the Federal Reserve.
In March, however, the bank passed the test in which the Federal Reserve evaluated what would happen to the bank if unemployment rose to 13%, the stock market decreased by half and housing values decreased 21%.
JPMorgan Chase (JPM) passed the stress test in 2011 and bumped its dividend to 25 cents from 5 cents, and again earlier this year to 30 cents. US Bancorp (USB) passed the stress test in 2011 and boosted its dividend to 12.5 cents last year from 5 cents and again earlier this year to 19.5 cents.
Bank of America earned a profit of $1.4 billion in 2011, or 1 cent per share, after reporting a loss of $2.2 billion in 2010. Most of the revenue was earned in the fourth quarter, when the bank posted earnings of $2 billion, or 15 cents per share. The company's most profitable division was card services, which reversed 2010's net loss of $7 billion to earn $5.8 billion in 2011. The company will release its first-quarter 2012 financial results April 19.
Bank of America also restructured its business divisions as part of CEO Brian Moynihan's "New BAC" program to return the bank to higher profitability, according to an SEC filing this week. The program, announced last year, was set to reduce expenses by $5 billion and cut 30,000 jobs.
The bank combined its deposit, business banking and card services segments into a consumer and business banking division. Commercial banking and corporate and investment banking were combined into a global commercial banking division, and the global markets group became its own division.
Joseph Price, the former head of consumer, small business and card banking, and Sallie Krawcheck, former head of global wealth management, left those positions in September and were replaced by co-chief operating officers Thomas Montag and David Darnell.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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