Bove Says BAC Streamlining Its Operations By Shedding Assets

In an article on CNBC, analyst Dick Bove of Rochdale Securities said Bank of America (NYSE: BAC) is in the process of selling roughly $500 billion of assets. Through this move, the company aims to streamline its operations and comply with new financial regulations.

Bove said that the company "has embarked upon a course to rationalize its organization." He expects the financial giant to make broad-based reductions in its asset portfolio worth $2.36 trillion. According to him, the company would shed roughly 21% of its assets.

In another move, Bank of America has recently placed its Balboa Insurance unit for sale, dumped several institutions that it owned, besides selling off a package of troubled assets, private equity funds and real estate loans.

In a research note to clients, Bove wrote, “It is unclear where the bank will go next, but there is a great deal that can be sold and the sales are just beginning to gain momentum.” BAC can also target its credit card business, certain Merrill Lynch trading platforms and branches in the future.

The bank may also relook at its mortgage business to check whether it fits into the institution’s future plans, according to Bove.

"The home mortgage company is not making money and seems unlikely to make any for an indeterminate period of time… It is not unrealistic to assume that at some point the bank may decide to make mortgages through its branches and rid itself of the private contractor part of the business," Bove added.

BAC has underperformed its peers so far this year. However, its shares have added 1.45% over the past month.

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