Bank of America Corp.’s gaffe on U.S. stress tests has meant “tough consequences” for investors, CEO Brian T. Moynihan said Wednesday as his staff and directors regrouped to figure out what went wrong.
The board has started multiple reviews of how the mistake occurred and who’s responsible while a new submission to the Federal Reserve is prepared, officials told shareholders Wednesday at the annual meeting in Charlotte, N.C. Chief Financial Officer Bruce Thompson said revisions are due by May 27, and the regulator has 75 days to respond.
Moynihan, in his fifth year atop Bank of America, has been thwarted at least twice in attempts to boost the dividend from 1 cent, where it has languished since the financial crisis. The latest rough patch came last week when plans for an increase to 5 cents and more share buybacks were suspended because of a $4 billion error in capital calculations.
The mistake at the Charlotte-based bank was “disappointing” to everyone, Moynihan told the gathering. Thompson affirmed that the revised plan will mean a lower payout for stockholders of the second-largest U.S. lender. He didn’t specify the amount and said he couldn’t predict the Fed’s reaction.
All the 15 directors standing for election and the independent accounting firm won approval during Wednesday’s vote, the company said in a statement, without giving the tally.
The bank is still wrestling with legal claims inherited from his predecessor’s crisis-era takeovers of Countrywide Financial Corp. and Merrill Lynch & Co., and investors pressed for answers on when the last of the disputes will be resolved. Moynihan, 54, declined to give a timetable.
Bank of America had shown progress, improving profit last year to $11.4 billion, the highest since 2007. Investors had speculated the company would start to rebuild its quarterly dividend toward the 64 cents offered before the financial crisis.