Bank of America asks Fed to clarify stress test results

By Saeed Azhar

NEW YORK (Reuters) -Bank of America Corp (BofA) said on Monday it had begun a dialogue with the Federal Reserve to understand differing results between the central bank’s stress test and the company’s own under the Dodd-Frank Act.

Unlike rivals, BofA, the second-biggest U.S. lender, has not made any announcements about its dividend or share repurchases since the stress test results were published last week.

The Fed’s annual test showed major lenders, including BofA, have enough capital to weather a severe economic slump, paving the way for them to issue share buybacks and dividends.

But BofA wants to understand the differences in a category called “other comprehensive income” during a nine-quarter period measured in the test, it said in a statement.

The Federal Reserve declined to comment.

BofA’s own analysis implied a worse result than the Fed’s test last week, Piper Sandler analyst R. Scott Siefers said in a note published on Monday.

The discrepancy means “a little more uncertainty in BAC’s results than we would like, but hopefully no change to the end result” of the bank meeting a key regulatory requirement, he wrote.

JPMorgan Chase (NYSE:), Wells Fargo (NYSE:), Goldman Sachs (NYSE:) and Morgan Stanley (NYSE:) hiked their third-quarter dividends on Friday after sailing through the health check.

The banks index rose about 1.5% on Monday, while shares of Wells Fargo, Citigroup (NYSE:) and Bank of America (NYSE:) all climbed more than 1.5%.

Last year, BofA raised its dividend to 22 cents, the highest level since 2008, from 21 cents in 2021.