Bank of America exceeds $33.9bn capital cushion

Bank of America yesterday said it has built more than the $33.9bn (£20.7bn) capital cushion demanded by federal regulators.

The bank said it exceeded the buffer by conducting an exchange offer under which it expects to issue 200m shares.

In total, it has completed exchanges of $14.7bn in preferred stock for common equity, adding to the buffer required by the government following a “stress test” of the bank’s ability to weather a deep recession.

The exchanges follow other capital actions by the North Carolina-based bank, mainly the issuance of common stock and a sale of part of its stake in China Construction Bank.

Bank of America has received $45bn in capital injections from the Treasury Department’s Troubled Asset Relief Programme (Tarp) and has indicated it would like to begin repaying these funds by the end of the year.