i-Bank killer Meredith Whitney met with Bank of America (BOFA) CEO Ken Lewis yesterday. Lewis must have charmed her, because Whitney withheld her usual brickbats and just relayed what he had to say (Reuters):
Bank of America Chief Executive Kenneth Lewis was quoted by [Whitney] as saying the planned acquisition of Countrywide Financial Corp remains attractively priced, even if write-downs at the largest U.S. mortgage lender exceed expectations.
Oppenheimer & Co analyst Meredith Whitney, in a June 11 report, said she met on Tuesday with Lewis, who runs the second-largest U.S. bank.
She said Bank of America also views its quarterly dividend of 64 cents per share as “safe,” though it equates to an 8.64 per cent annual yield based on Tuesday’s closing prices.
According to Whitney, Lewis said Bank of America has made “significant write-down assumptions across Countrywide’s portfolio,” and that even if write-downs are higher than expected, the $3.1 billion transaction would remain attractively priced, but to a “slightly lower degree.”
Not clear yet whether we’re seeing the earlier signs of a new kinder, gentler Meredith Whitney or whether the star analyst really doesn’t believe Ken Lewis should be sacked.
Either way, we’ve been meaning to ask Meredith: When are we going to get a bottom in these stocks, anyway? An 8+% dividend? Even if BAC cut this in half, it would still be an attractive yield. And we’re not expecting ALL banks to go out of business.
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