Bank of America Corp. has approved spending up to $3.75 billion through next year to repurchase as much as 75 million shares, replacing an expiring buyback authorization.
It wasn't immediately clear whether the bank, which suspended buybacks last year to shore up its capital levels, would soon begin repurchasing stock. The company said in December it might not be able to resume repurchases until 2009.
Bank of America has a market capitalization of $144 billion and 4.4 billion shares outstanding. The new buyback authorization is much smaller than the 200 million-share plan it replaces.
Meanwhile, Bank of America also reiterated it will pay a quarterly dividend of 64 cents a share in the coming weeks. On Monday, it reported better-than-expected second quarter results and vowed to protect the payout.
Analysts and investors have speculated Bank of America may have to join other financial firms in cutting dividends to conserve capital amid heavy losses linked to mortgages and other credit.
Bank of America shares fell to an 8-year low last Tuesday before rebounding following the Securities and Exchange Commission's announcement that it would take emergency action aimed at reducing short-selling in some shares.
The stock was recently up 2.8% at $33.24. The shares have rallied 39% this month.