Interesting and strongly-worded denial out from Bank of America, regarding the FT’s report that it was looking to raise $10bn in fresh capital.
Via Reuters, here’s what Bank of America is saying:
“The Financial Times report is completely inaccurate. Bank of America has not been given a final number by the Federal Reserve. The bank is not working on plans to raise $10 billion in common equity,” said Scott Silvestri, a spokesman for the bank.
But here’s what the FT said:
Citigroup and Bank of America are working on plans to raise more than $10bn each in fresh capital, even as they launch last-ditch attempts to convince the US government they do not need to bolster their balance sheets.
BofA, which has had $45bn in government aid, was found to need well in excess of $10bn, people familiar with the matter said.
Two things stand out – there is no mention of “common equity” in the FT’s story (and our banking reporters are more than sophisticated enough to know capital raising can take many forms); the kicker is the “well in excess” qualifier.
Bank of America’s response, therefore, is curious – curiously specific. In other words, does “not working on plans to raise $10bn in common equity” really mean, “working on raising a whole lot more through other means?”
We will know soon enough – stress tests results are due after US markets close on May 7.