Bank of America (BAC) Not Cleared for Dividend Hike

In a blow to Bank of America, the Federal Reserve said after performing stress tests on the giant bank they won't allow the financial institution to raise dividends at this time.

Major competitors like JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Co. (NYSE:WFC) and BB&T Corp. (NYSE:BBT) have already been cleared and raised dividends immediately afterwards.

The bank's Tier 1 common equity rose 13 percent in 2010, as its Tier 1 common equity ratio hit 8.6 percent from 7.1 percent in 2009.

In a filing with the SEC Bank of America said they have been rejected by the Fed concerning their request to raise the dividend in the second half of the year.

The bank was told they could re-submit a revised capital plan if they chose.

BofA said it will continue to pursue the matter and hope they will be able to offer a dividend boost in the second half.

Bank of America was trading at $13.55, falling $0.33, or 2.38 percent, as of 11:31 AM EDT.