Jim Cramer supported Goldman Sachs Group Inc (NYSE:GS)’s decision to upgrade the rating of Bank of America Corp (NYSE:BAC) in his CNBC show. Cramer agreed with Goldman Sachs’s assessment that the bank is finally over with its problems and it can certainly focus on its business.
In his show, “Squawk on the Street”, Cramer said,
“Putting this stuff past them allows [CEO] Brian Moynihan to spend all of this time being a banker.”
It sounds quite similar to what the CEO himself said last month after announcing the settlement,
“We believe this settlement, which resolves significant remaining mortgage-related exposures, is in the best interests of our shareholders, and allows us to continue to focus on the future.”
Bank of America Corp (NYSE:BAC) agreed to pay $16.65 billion in legal settlements because of its sales of bad mortgages to the customers, which played a crucial role in the financial crisis. The bank will make cash payments of $9.65 billion followed by consume relief services worth $7 billion. This is the biggest legal penalty imposed on any single organization by the US regulatory authorities. Unlike Bank of America Corp (NYSE:BAC), other institutions including JPMorgan Chase & Co. (NYSE:JPM) and Citigroup Inc (NYSE:C) paid $13 billion and $7 billion respectively.
Earlier, Goldman Sachs Group Inc (NYSE:GS) upgraded Bank of America Corp (NYSE:BAC)’s shares from “Neutral” to “Buy”. This is not the first time when Cramer has came forward in support of the bank and earlier he said that it is not fair to put up such a huge penalty on the bank and letting the defaulting bankers walk away by the Justice Department. Finance leaders such as Warren Buffet have supported Bank of America Corp (NYSE:BAC) for potential growth in future.
This article has been written by Prakash Pandey.