BankAmerica Corp. announced Monday that it would increase its share buyback program by 60%, to $3 billion.

The bank's stock has surged 15% since late January, partially in anticipation of a broader buyback program, which is a return of capital to shareholders. The new program authorizes the repurchase of up to $2 billion of common shares and $1 billion of preferred stock by the end of 1997.

The action, announced after the market closed, amounts to an increase of $1.15 billion in the common stock buyback authorization and a $663 million increase in the preferred program, the company said.

BankAmerica shares rose $1.25 Monday, to $75.375, after Merrill Lynch & Co. analyst Judah A. Kraushaar lifted his rating on San Francisco-based BankAmerica to "accumulate" from "neutral," partly on the expectation of a boost in the buyback program.

"We see a series of initiatives coming over the next 12 to 18 months, and we are impressed that BankAmerica will likely be primarily focused on internal execution," the Merrill analyst said.

Mr. Kraushaar gave high marks to the bank's new chief executive, David Coulter, for focusing on internal growth and for publicly saying the company would likely forgo acquisitions.

"Mr. Coulter seems interested in tightening capital allocation methods, developing improved management information systems, and realigning BankAmerica's organizational structure," he said.

In the past month several analysts have predicted such a program, and as a result BankAmerica's stock has enjoyed a run-up, more than doubling the 7% increase in the American Banker index since the end of January.

Another factor in the price gain is the expectation that the bank may divest some of its western units. BankAmerica has not commented on its plans for the western franchise, but its head of Alaska banking recently stepped down.

Late last month Alex. Brown & Sons analyst Joseph Morford predicted BankAmerica would shed some unprofitable operations, including the Alaska and Hawaii units.

Mr. Kraushaar said the bank could shed from $10 billion to $17 billion of assets.

In other news, PaineWebber Inc.'s Lawrence Cohn initiated coverage of Banc One Corp. with a "neutral" rating, outlining a gloomy outlook for the bank.

The bearish Mr. Cohn praised Banc One's moves to centralize but added that he was not convinced the strategy would produce higher revenues.

Banc One is likely to renew acquisitions this year, he said. New purchases would supply sound cost-cutting opportunities to the bank, which has been inactive in the merger market this year, he said.

But higher loan-loss reserves and low net interest margins will cut into earnings, he said. Banc One finished up 50 cents, at $36.75.

Fifth Third Bancorp. rose $3 a share, to $54, after being listed on the Standard & Poor's 500 index late Friday. Companies added to the index commonly enjoy a bounce as fund managers who track the S&P add the newly listed stock. McDonald & Co. downgraded the stock on price.

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