BofA’s Dividend Plan Shot Down

The Federal Reserve recently gave the all-clear sign for banks to raise their dividends. Well, not totally all-clear. The dividend increases still need to be approved by the Fed. After all, you can’t have public money being shoveled right to shareholders. The government wants them to make a profit first. So I was happy to see that JPMorgan Chase ($JPM), a member of our Buy List, was allowed to raise its dividend from five cents per share to 25 cents per share.

Yesterday we learned that Citigroup ($C) was allowed to pay a teeny, tiny 0.1-cent dividend meaning a 1-cent dividend after 1-for-10 reverse stock split.

I thought the Fed was going to be pretty liberal. Apparently not because Bank of America’s ($BAC) dividend plan just got shot down. In the regulatory filing, BAC didn’t say how much the increase was outside of being a “modest” one.

So if Citi was allowed an extremely minor dividend increase, what does the Fed think of BAC?

Posted by on March 23rd, 2011 at 9:56 am


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