Bank of America to repay government bailout funds

Bank of America Corp said it plans to repay its US$45bn (€29.8bn) in government bailout funds in the next few days, a move that will help the troubled bank recruit a new chief executive officer.

The bank said in a statement it would use available cash and raise $18.8bn (€12.4bn) in capital to repay the money, which it received during the height of the credit crisis last year and after its purchase of Merrill Lynch and Co. earlier this year.

Bank of America has been searching for a successor to chief executive officer Ken Lewis since the bank announced in late September that he planned to retire on December 31.

However the bank, burdened with government restrictions and close oversight after accepting the Troubled Asset Relief Programme funds, has so far been unable to sign a new chief executive.

“It removes the stigma that we’ve had as a company,” spokesman Bob Stickler said of the planned repayment. “We become more attractive to a CEO candidate. Whether that means we get somebody external is impossible to say.”

The bank has said it was considering candidates from inside and outside the company. Mr Stickler said a decision is expected “in the near future”.

Investors were relieved by the news, and sent Bank of America stock up 3.3% in after-hours trading.