Bank of America Corp (NYSE:BAC) has been rethinking its business strategy. The company has reached a settlement, with respect to two lawsuits filed against it in 2009. The suits concerned the multibillion dollar losses in fraud at Taylor Bean and Whitaker. The bank has also decided to reduce credit exposure to coal companies. The re-evaluation has been done amid growing risks of competition from natural gas companies and future regulations.
Bank of America had been sued by BNP Paribas and Deutsche Bank for $1.75 billion in 2009. The two European banks blamed the losses on mortgage notes on BAC, since BAC was the broker in these deals. Now BAC has paid $315 million in settlements, which the bank’s spokesperson said was done in an effort to recover losses. Bank of America had initially tried to sue FDI over the losses, after the mortgage market collapsed in 2009. This had resulted in a counter lawsuit by FDI, which stated that the bank does not have the authority to do so. FDI, at the end, was paid $1.03 billion in a $17 billion settlement made with the department of justice
Furthermore, the bank has been exercising corporate social responsibility to slowly lower the credit services to coal and other mining companies. The company representatives stated that its renewable energy portfolio has grown to be three times larger than the coal production portfolio. This, they say, has been done to accelerate the transition from a high-carbon economy to a low-carbon one.
Recently, a number of environmental research groups and universities have been pressurizing businesses and researchers to concentrate less on coal driven energy. Additionally, the drop in fossil fuel prices has resulted in great losses for the production companies. BAC has outlined that it is adopting a policy to promote responsible and efficient use of coal energy, while trying to balance the risks it poses to the investors.
Bank of America Corp (NYSE:BAC) closed at $16.24, after losing 0.31% on May 7. The company has 10.5 billion shares being traded in the market, with a 52-week range of $14.37-$18.21.