Bank of America to Pay $713 Million in Taxpayer Dividends

Pedestrians pass by a Bank of America branch May 6, 2009 in Chicago, Illinois. The bank will pay $713 million to U.S. government for TARP borrowings. (Scott Olson/Getty Images)

NEW YORK—Bank of America Corp.’s board has authorized the bank to pay $713 million in dividends to the U.S. government related to its Troubled Asset Relief Program (TARP) borrowings.

The dividends will be paid by August 17 and relate to the preferred shares owned by the U.S. Treasury department after the government gave the bank $45 billion in separate federal bailouts.

Along with Citigroup Inc., Charlotte, N.C.-based Bank of America has received the most money from TARP among all financial institutions.

Bank of America’s troubles began early last year after the bank took over Countrywide Financial, a subprime mortgage lender. After taking on Countrywide’s risky mortgages, Bank of America was also called upon to take over struggling investment bank Merrill Lynch & Co. in September 2008.

Last month, a group of U.S. banks including Morgan Stanley, JPMorgan & Chase Co., and Goldman Sachs Group Inc., were approved by the U.S. government to repay their TARP loans. Bank of America was not one of the banks.

Bank of America shares are down 10.2 percent, to $12.64 as of Friday’s close, since the beginning of the year.