BofA CEO says bank, BlackRock still partners

By Joe Rauch

NEW YORK (BestGrowthStock) – Bank of America Corp (BAC.N: ) has no plans to fully sever strategic ties with BlackRock, the world’s largest asset manager, Chief Executive Officer Brian Moynihan told analysts in Boston on Thursday.

BlackRock Inc (BLK.N: ) announced on Wednesday it planned to sell 34.5 million shares owned by Bank of America. The secondary offering could cut BofA’s ownership from 33.9 percent to 12.6 percent.

“You can invest in BlackRock and we’ll focus on being a strategic partner with them for a long, long time,” Moynihan said at the 2010 BancAnalysts Association of Boston conference.

BofA acquired the stake as part of its 2009 purchase of Merrill Lynch at the height of the financial crisis. BofA holds the right to appoint two board members to BlackRock’s board.

Moynihan said the relationship between the two companies will extend beyond his and BlackRock Chief Executive Laurence, or Larry, Fink’s tenures.

“We’ll be together for the duration of Larry and mine’s career and beyond,” Moynihan said.

Charlotte, North Carolina-based Bank of America has focused on stripping the company of what Moynihan calls extraneous businesses during the last year.

This year, it has sold stakes in Latin and South American banks, sold off its Columbia Assets Management business and has put its Balboa Insurance unit up for sale.

Moynihan said the bank is now focused on more effectively using shareholder capital and has specific return targets for businesses it operates. The bank will sell those that do not meet more stringent guidelines.

“If we have a business that doesn’t have 1 percent return on assets, we have to ask why we’re in it,” said Moynihan.

He also continued to deflect suggestions by some analysts that the bank would need to raise money as the industry implements new capital standards required by both the international Basel III accords and the Dodd-Frank Act approved by Congress this summer.

The bank can remain above 8 percent tangible common equity, he said, throughout the introduction of the new capital rules in the coming years, without raising additional capital.

BofA shares were up 2.4 percent at $11.80 in midday trading, while BlackRock rose 2.1 percent to $169.15.

(Reporting by Joe Rauch; editing by Lisa Von Ahn and Andre Grenon)

BofA CEO says bank, BlackRock still partners