Several analyst reports publicized in a Wall Street Journal story Monday have raised questions about Bank of America’s continued ability to sustain heavy mortgage-related losses.
The Charlotte-based bank recently announced an $8.5 billion mortgage settlement. Analysts are expecting still another settlement of around $7 billion, also related to the bank’s mortgage practices. Investors are now skeptical of Bank of America’s ability to withstand such losses.
Bank of America’s capital supply has been called into question in the wake of its mortgage problems. Analysts want the bank to raise additional equity to ensure it has adequate capital reserves, arguing that in a bad economy the bank should shore up its assets at the expense of higher profits.
But for now, the bank has not revealed any intention to tap the public markets to raise additional capital.
Bank of America shares fell 3.27 percent today, closing at $10.35.