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Non-Tech : Banks--- Betting on the recovery

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To: tejek who wrote (274)	3/18/2009 9:52:03 AM
From: Road Walker	Read Replies (1) of 1428

BofA's (BAC) Lewis Sees Paying Back TARP By Early Next Year 8:49 AM EDT March 18, 2009 According to reports from the Charlotte Observer, the CEO of Bank of America's (NYSE: BAC), Ken Lewis, said the embattled megabank could pay back its $45 billion in government capital by late this year or early next year depending on the economy.Lewis also reiterated that the bank will be profitable this year "absent some unexpected meltdown" and will pass the government's stress test.Lewis also told the paper he would like for the bank to make $30 billion in a year before he exits.On the TARP payback, Lewis said they could pay it back now but the bank is maintaining higher-than-normal capital cushions because of the "fragile" state of the financial system. He said the money is not a "gift" as the bank has already made an initial $402 million dividend payment to taxpayers. A last-minute provision, inserted in the stimulus bill last month, deleted the requirement about replacement capital being needed before TARP money could be paid back. A number of smaller banks have already filed notice with the Treasury Department about plans to pay back the investment.On the controversial Merrill Lynch acquisition, Lewis said, "the next three to five years or a longer time timeframe of five to 10 years I think Merrill will prove to be one of the best acquisitions we've ever made."Lewis said he doesn't think about losing his job, saying he wants to see the bank get through this rough time and realize its full potential, which he contests is paying back TARP and making profits of $30 billion a year after tax. Lewis said the bank has a shot at hitting the $30 billion mark in 2011.Lewis said his biggest mistake was taking so much TARP money, which he said lumped them together with the more-damaged Citigroup (NYSE: C). He said he took the extra money "in an abundance of caution because you just don't know how bad things could get." You can read the Charlotte Observer Article Here

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