Tomahawk, WI 03/19/2014 (Basicsmedia) – Bank of America Corp (NYSE:BAC) shares have been on a steady upward march since 2013 and have risen by more than 33% in the last one year. Its various legal troubles have been mostly settled by paying billions of dollars to the government. No doubt, the litigation expenses have been quite spectacular — upwards of $50.0 billion since the financial crisis — but the Company also has assets in excess of $2 trillion. In the latest news of fresh legal troubles, the Federal Deposit Insurance Corporation (FDIC) sued 16 large banks on March 14 including Bank of America for manipulating the Libor interest rate.

Positive News Just Round The Corner

Despite those ill omens, we are expecting some good news to emerge from the bank towards the end of March. The Dodd/Frank stress test results are expected on March 20 and the Comprehensive Capital Analysis and Review (CCAR) will be completed on March 26. A hike in dividends is expected from banks after the Fed announces the results of its CCAR program. Bank of America Corp (NYSE:BAC) is expected to increase its dividends by 400%.

In the long-term, the bank will profit from moves such as branch closings and manpower reductions which have been ongoing since 2011. The smaller branch network will definitely help the bank lower its personnel expenses and lease payments as it seeks to focus more on loans, asset and wealth management and similar services rather than traditional consumer banking where the profit margins are lower. It has a solid online presence with 30 million active users of its online banking system and more than 14 million users of its mobile website.

It has introduced a new initiative known as ‘Safe Balance’ wherein a monthly fee of $4.95 will be charged on low balance accounts and waiver of the per transaction fee of $35 in case of overdrafts. This will create a consistent source of long-term revenue while persuading most of the bank’s customers to continue to bank with Bank of America.

No wonder Warren Buffett decided to invested $5 billion in Bank of America Corp (NYSE:BAC) through Berkshire Hathaway Inc. (NYSE:BRKA).

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