Bank of America
The divestment continues
B of A has been desperately selling its noncore assets to meet upcoming capital requirements and strengthen its capital ratios. Besides that, it is being plagued by huge legal liabilities. It is now in talks with The Blackstone Group
Since credit card portfolios are deemed risky and require more capital to be put up, B of A is trying to slim down its card business. While it’s selling its MBNA Canada credit card arm to Toronto-Dominion Bank
The Foolish bottom line
B of A is likely to continue shedding noncore assets till it strengthens its balance sheet and frees up enough cash. The selling of its assets might help the bank improve its capital ratios and meet higher incoming capital requirements. But it cannot continue selling off its parts forever without cutting too close to the bone.
Fool contributor Zeeshan Siddique does not own any of the stocks mentioned in the article. The Motley Fool owns shares of Bank of America. Motley Fool newsletter services have recommended buying shares of BlackRock. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.