Bank of America still committed to buy Countrywide Financial on 100 Mortgages

Bank of America Corp Chief Executive Kenneth Lewis has said that they are still committed to buying Countrywide Financial Corp even though they are losing money on their mortgages. Lewis has said that the $3.1 billion purchase of Countrywide is an important strategic move of Bank of America Corp; this will then give them a 20 percent share in the mortgage market place. Lewis has also said that the deal looks financially attractive, even though the legal and credit costs looks to top $10 billion.

Speaking at a Wall Street Journal conference, Kenneth Lewis said “We think we’ve got it right,” he also said “We still have room to make it a financially attractive transaction.” Many thought that with some advocates, lawyers and politicians criticizing the merger, Lewis would not go ahead with the deal, but he has said that he will not walk away from the deal. Bank of America are also standing firm on their dividend payout, they have said that the deal of a 64 cent-a-share dividend is safe.

However Bob Stickler, who is a spokesman for the bank has said that at a recent dinner with Lewis, he did not once use the word safe. Such a high dividend is seen as a surprise to a number of other banks, as they are slashing there dividends, like Citigroup Inc, Washington Mutual Inc and Wachovia Corp. According to Reuters, Bank of America shares on the New York Stock Exchange has fallen 2.6 percent to a five year low of $28.85. Countrywide has fallen 6 percent to $4.58.

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