Yesterday, Bank of America announced plans to repay the $45 billion in government bailout money it received last year. They hope the move will help them recruit a new CEO, a feat they have yet to manage since their last CEO (Ken Lewis) announced this was to be his last year with the company.
The bank said in a statement it would use available cash and raise $18.8 billion 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 & Co. earlier this year.
Bank of America has been searching for a successor to CEO Ken Lewis since the bank announced in late September that he planned to retire on Dec. 31. But the bank, burdened with government restrictions and close oversight after accepting the Troubled Asset Relief Program 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. 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 percent in after-hours trading.