Magazine article American Banker

BankAmerica Increases Stock Buyback to $3B

Magazine article American Banker

BankAmerica Increases Stock Buyback to $3B

Article excerpt

BankAmerica Corp. announced Monday that it would increase its share buyback program by 60%, to $3 billion.

The bank's stock has surged 15% since late January, partially in anticipation of a broader buyback program, which is a return of capital to shareholders. The new program authorizes the repurchase of up to $2 billion of common shares and $1 billion of preferred stock by the end of 1997.

The action, announced after the market closed, amounts to an increase of $1.15 billion in the common stock buyback authorization and a $663 million increase in the preferred program, the company said.

BankAmerica shares rose $1.25 Monday, to $75.375, after Merrill Lynch & Co. analyst Judah A. Kraushaar lifted his rating on San Francisco-based BankAmerica to "accumulate" from "neutral," partly on the expectation of a boost in the buyback program.

"We see a series of initiatives coming over the next 12 to 18 months, and we are impressed that BankAmerica will likely be primarily focused on internal execution," the Merrill analyst said.

Mr. Kraushaar gave high marks to the bank's new chief executive, David Coulter, for focusing on internal growth and for publicly saying the company would likely forgo acquisitions.

"Mr. Coulter seems interested in tightening capital allocation methods, developing improved management information systems, and realigning BankAmerica's organizational structure," he said.

In the past month several analysts have predicted such a program, and as a result BankAmerica's stock has enjoyed a run-up, more than doubling the 7% increase in the American Banker index since the end of January. …

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