Fitch Ratings raised its junk-level preferred stock rating on Bank of America Corp. Tuesday, citing improvement in the Charlotte banking company's risk profile.

The ratings agency said it saw less potential for additional government support or need to omit dividends on preferred stock. The nation's largest bank by assets succeeded in tapping the equity markets in the second quarter for billions in capital and has entered the external debt markets several times since June.

Challenges remain, however, as the company searches for a successor to embattled Chief Executive Ken Lewis. Earnings, meanwhile, remain under pressure, and asset-quality problems are severe, with loan-loss provisions remaining high.

The ratings agency raised its preferred stock grade by one notch, to B-plus, or four steps into junk status. At the same time, it put several ratings on watch for upgrading.

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