Bank of America (BAC) Shares Rise 5.1% in Week As Banks Continue Breakout

Since the start of trading last Monday, Bank of America’s stock (NYSE:BAC) is up over 5% as of today. Investors are becoming more comfortable with the big bank stocks following the mortgage settlement terms and Greek austerity.

Prudential Financial (NYSE:PRU) hired Bank of America Merrill Lynch (NYSE:BAC) to advise it on a possible bid for ING Groep’s (NYSE:ING) Asian insurance operations, according to South Korean media, reports Reuters.

Bank of America (NYSE:BAC) announced 34% growth in health savings accoutns in 2011. The growth is attributed to increases in account use among employees of existing corporate clients, and new relationships with individuals and employers.

Former Fed chairman Paul Volker is expected to file a comment letter on the Volcker rule before a deadline today, saying that the U.S. financial system will be safer and healthier with a ban on proprietary trading by banks, sources say, reports the Wall Street Journal.

Last week’s $25B settlement between the five major mortgage lenders and federal officials along with state attorneys general removes some some portion of the legal risks that have dogged the bank stocks for years. Bank of America (NYSE:BAC), Citigroup (NYSE:C), JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC) and Ally Financial agreed to terms on violations such as the use of “robo-signing” and failures to offer non-foreclosed alternatives. Barron’s “The Trader” column points out that these banks are in much better shape compared with the solvency issues of 2008-2009 and the continuing problems at European banks. JPMorgan (NYSE:JPM), operating with excess capital, trades at a price-to-book value of about 0.8x, and 1.1x tangible book. After passing regulatory hurdles in March some contend that the bank will be allowed to increase stock repurchases significantly and up its dividend. Bank of America and Citigroup remain the more speculative stocks of the big commercial banks, but should the bank rally continue, Barron’s believes they’ll undoubtedly do better.

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com