Bank of America shares drop on capital plan suspension

<p>Shares in the bank fell six per cent.</p>

The share price of Bank of America fell heavily yesterday (April 28th) following the company's announcement it is suspending its capital plan because of an accounting error.

Stocks in the bank fell by more than six per cent after Bank of America said the mistake was related to its acquisition of investment bank Merrill Lynch five years ago.

The US Federal Reserve said in a statement that the bank would now have to suspend that plan. Bank of America had previously announced plans to buy back $4 billion (£2.4 billion) of its shares, while it also said it would boost its dividend.

"Until receiving notice that the Federal Reserve has not objected to the new capital plan, Bank of America will not be able to increase its capital distributions, including those increases approved during the 2014 CCAR exercise last month," said the Fed.

Shares in Bank of America fell by 6.27 per cent in yesterday's trading session on the New York Stock Exchange, slipping by a further 0.6 per cent in after-hours trading.

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