Bank of America (BAC) refutes Meredith Whitney’s report that CEO Ken Lewis said the bank’s dividend is “safe”–which is basically the same as saying the bank plans to cut the dividend. The market has already assumed this, of course, and is justifiably smashing BAC as a result. Dealbook:
Meredith Whitney, the outspoken banking analyst from Oppenheimer & Company, shared a meal Tuesday night with Bank of America boss Kenneth D. Lewis, along with a few buy-side clients. Among the topics on the table at the dinner, held at an upscale restaurant in New York’s Upper East Side, were the bank’s acquisition of Countrywide Financial, future mergers and the fate of the bank’s dividend.
It’s not clear if wine was served, but it seems that Ms. Whitney came away from the dinner with a very different impression of what Mr. Lewis had to say on that last topic. In a note to investors Wednesday, she wrote that Bank of America “views the dividend as safe.”
Not so, a spokesman for Bank of America told DealBook
“[Mr. Lewis] never said the dividend was safe,” said the spokesman, Bob Stickler. What Mr. Lewis actually said, according to Mr. Stickler, was that he was “going over scenarios” but that “if there is a significant recession for a number of quarters, a dividend cut would be one of the options that Bank of America would explore.”
Will this direct attack on Meredith Whitney’s credibility prompt a response from the famously bold Oppenheimer analyst? We’re on the edge of our seats.