Bank of America ‘much better’ now: CEO
NEW YORK — Bank of America is in a better position now than during the financial crisis, chief executive Brian Moynihan said Wednesday, trying to reassure investors after sharp losses in the share price.
“The fundamentals are so much better in our country and in our company and in our industry than they were four years ago,” he said in a conference call with analysts.
Amid rising concerns about the growing number of lawsuits facing the country’s biggest bank by deposits, Moynihan insisted that “we continue to clean up the mortgage issues” related to the acquisition of Countrywide Financial in 2008.
On Monday shares plunged more than 20 percent after US insurer AIG sued Bank of America for $10.5 billion, accusing it of “massive fraud” over dodgy mortgage-based securities AIG bought from Countrywide Financial, the former mortgage giant that the bank took over in 2008.
After partially rebounding Tuesday, the bank’s shares sank another 10.9 percent to $6.77 Wednesday, leaving them down 29 percent from a week ago.
In June, the bank announced an $8.5 billion settlement with a group of more than 20 major investors over losses on mortgage-backed securities, which AIG has also raised questions about.
Moynihan was not CEO when Bank of America bought the company, but said there were not many days when he thinks “positively about Countrywide.”
“We still have a lot of work to do,” he added.
Moynihan said that credit demand remained “slow” even while credit risk “continues to decrease.”
He reaffirmed that the bank did not expect to need to raise more capital to meet the levels required under the new Basel III international regulations.