The Federal Reserve objected to Bank of America's plans to boost its dividend and told the financial institution to revise its proposal.
The largest U.S. bank by assets said it intends to submit a revised proposal to the Fed and still hopes to increase its dividend in the second half of the year. CNBC's Melissa Lee said the developments highlights BofA's weak capital position.
On Friday, the Fed approved dividend increases for a group of banks after having conducted a second round of stress tests on the U.S.'s 19 largest financial institutions. Kanundrum Capital founder Brian Kelly was quick to sell the news and remains short financials via the Financial Select Sector SPRD exchange-traded fund.
"When you look at the financials and particularly Bank of America, they don't have the capital there. Then you have to question going forward, where's their earnings going to come from?" Kelly said. "We know we have a steep yield curve now, but that's starting to come in. So for me, I am a short-seller of the financials for a while."
Meanwhile, Steve Grasso of Stuart Frankel has sold two-thirds of his position in Citigroup . Grasso noted he sold Citi on the 1-for-10 reverse stock split, which the New York City-based bank announced on Monday. He said this is a short-term trade, though. The "Fast Money" trader plans to buy C shares back on momentum.
CALL OF THE DAY: AOL