Bank of America has raised $26 billion

Lending giant says it is 'well on its way' towards meeting the nearly $34 billion in capital requirements that regulators demanded after the bank stress tests.

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By David Ellis, staff writer

NEW YORK ( -- Bank of America said Wednesday that it was "well on its way" towards raising the nearly $34 billion in capital that government regulators said it must do earlier this month to have a buffer for future loan losses.

The beleaguered banking giant said it has raised almost $26 billion since the government announced the results of its so-called "stress-test" program, including $13.5 billion through a stock sale.

The remaining funds were raised through the company's sale of its stake in China Construction Bank and the conversion of $5.9 billion of non-government preferred shares into common stock.

The Charlotte-N.C.-based firm said Wednesday it was weighing another conversion of preferred shares not owned by the government, depending on market conditions.

But Bank of America (BAC, Fortune 500), like many peers who were deemed to be facing a capital deficiency as a result of the stress test, is trying to avoid having to convert the government's $45 billion preferred share stake in the company into common stock.

"The company hopes to use the majority of the proceeds from these initiatives to reduce reliance on government support for the company," Bank of America's chief financial officer Joe Price said in a statement Wednesday.

BofA rival Citigroup (C, Fortune 500) has announced, however, that it plans to convert a portion of the government's stake in it into common stock.

Bank of America also reiterated previously disclosed plans to sell some of its non-core businesses including First Republic Bank and its Columbia Management Group to help raise capital. The company has said it is also weighing several joint ventures.

Separately Wednesday, regional lender PNC (PNC, Fortune 500) said it had raised more than $600 million through a sale of common stock. The Pittsburgh-based bank was found to have a $600 million capital shortfall when the stress tests results were announced earlier this month.

Overall, regulators found that ten of the nation's nineteen largest banks needed to raise nearly $75 billion in capital as a result of the stress tests. To top of page

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