Bank of America Corp will raise its dividend as soon as possible next year if it passes the current Federal Reserve stress test, Chief Executive Brian Moynihan said on Tuesday.

Moynihan, speaking at the Goldman Sachs U.S. Financial Services Conference in New York, said the bank is targeting a dividend to shareholders of 30 percent of earnings, with the remaining 70 percent used to buttress the bank's capital.

He said the bank wants to raise the dividend as soon as possible. I don't see anything that would stop us, he said.

The 19 largest U.S. banks are undergoing a Fed stress test to see whether their balance sheets are strong enough to absorb various economic shocks. The U.S. central bank will not allow lenders' to increase dividends unless they pass the stress test.

Bank of America, the largest U.S. bank by assets, slashed its dividend to 1 cent per share in the 2009 first quarter after receiving $45 billion in U.S. government bailout aid. Before than, it paid 32 cents per share.

Moynihan said he regretted the bank's continuation of dividend payments as the financial crisis worsened and peaked in 2008.

Bank of America paid $15 billion in dividends during a period when it was posting negative cash flow, he said.

I would love to have that capital back, Moynihan said, noting the capital-raising the bank has done since then has been more expensive than if it had just slashed the dividend earlier.

BofA's dividend increased to 64 cents per share in September 2007, just as subprime mortgage problems began to surface in the U.S. housing industry. It was cut to 32 cents in December 2008 as the global financial crisis was at its apex.

Charlotte, North Caroline-based Bank of America is now focused on paying dividends after ensuring it has enough capital to absorb losses and meet new regulatory rules, Moynihan said.

BofA shares were off 9 cents at $11.55 in morning trading on the New York Stock Exchange.

(Reporting by Joe Rauch; editing by Dave Zimmerman and John Wallace)