Bank of America Corp. Chief Executive Kenneth D. Lewis said Tuesday that he wanted to start repaying $45 billion in federal bailout funds next month, after the government's "stress test" of his bank, and to give back the remainder as soon as the nation's wobbly financial system is stabilized.
In interviews at The Times, Lewis defended Bank of America's much-criticized acquisitions of Countrywide Financial Corp. and Merrill Lynch & Co. as strategically sound in the long run. And he said a cluster of financial indicators -- higher stock prices, slowing of home price declines and improvements in certain consumer delinquency gauges -- "leads me to think we're starting to see the bottom" of the recession.
With the Obama administration's stimulus efforts and the Federal Reserve's bolstering of financial markets, "the back of this beast will be broken," Lewis said. Bank of America will be ready to return its bailout funds, he said, as trust between financial institutions is restored and they resume lending to consumers and businesses.
He said he had seen nothing from the government to indicate that BofA would fail the stress test that the government will use to gauge the strength of the 19 largest U.S. banks.
When the test concludes next month, the Charlotte, N.C., bank would like to make its first payment, Lewis said.
"As soon as we think the markets normalize, we would very seriously like to pay it all back," he said. That could occur as early as the fourth quarter of this year, he added.
Only American International Group Inc., at $182.5 billion, and Citigroup Inc., at $50 billion, have received more government funds than Bank of America. The aid is not free -- Bank of America is paying Uncle Sam $2.85 billion a year in dividends -- and bank executives including Lewis have chafed at what they consider overly harsh moves in Congress to rein in compensation at banks receiving assistance.
Lewis' critics on Wall Street say his ambition for dominance in financial services led him to undermine his bank's stability by acquiring struggling Countrywide and Merrill Lynch. Some analysts and politicians suggested last month that Bank of America, which racked up a $2.4-billion loss in the fourth quarter, was so weak that it should be nationalized.
The bank's stock, which hit a low of $3.14 a share March 6, closed at $7.22 on Tuesday, down 58 cents.
