NEW YORK (Reuters) - Bank of America Corp Chief Executive Kenneth Lewis said the largest U.S. bank does not need more federal aid and is in better shape than most rivals, even as rumors, innuendo and falsehoods cause its stock to fall.
The assessment is Lewis' latest effort to thwart the fear that Bank of America might be nationalized, after such speculation last week sent shares of the Charlotte, North Carolina-based lender below $3 to their lowest level since 1984.
Our company does not need further assistance today and I don't believe we'll need any more in the future, Lewis said in a memo sent to employees. Our business prospects and financial condition are far superior to those of most of our competitors.
Bank of America spokesman Scott Silvestri confirmed the memo's contents on Tuesday.
In afternoon trading, the bank's shares were up 63 cents, or 16.11 percent, at $4.55. The KBW Bank Index of larger U.S. lenders was up 11.3 percent.
Bank of America and Citigroup Inc have each received $45 billion of government aid since October, as well as a bailout that capped losses on troubled assets.
Referring to pending federal stress tests of large U.S. banks, Lewis said Bank of America's own testing shows the bank is strong enough to weather today's economy, as well as environments where the unemployment rate is much higher.
Bank of America's overwhelmingly large deposit base, our consumer and commercial customer base, and earnings power give us a great advantage over banks that have been more badly damaged in the current crisis, Lewis wrote.
We continue to be profitable, our capital and liquidity are strong and we are actively lending in every sector of the marketplace, he said. The market appears to be moving in part based on rumor, innuendo and falsehoods propagated by the misinformed.
Lewis also said the bank's tangible common equity ratio, a measure of capital, is about 2.68 percent, twice the level of rivals he did not name but which face greater stress.
He also said Bank of America expects revenue this year to top $100 billion, including recently acquired Merrill Lynch & Co and a full year of results from the former Countrywide Financial Corp. Net revenue was $72.8 billion in 2008.
(Reporting by Jonathan Stempel; Editing by Bernard Orr)