BofA, 22 others may seek capital

Bank of America Corp., the second-biggest U.S. bank, and Sovereign Bancorp Inc. lead a group of 23 lenders that may need $12.4 billion more in capital as bad loans pile up, according to a KBW Inc. analyst.

Financial companies were the worst-performing stocks in 2007 and have the third-worst performance this year, which “leaves a lot of opportunities” for investment, KBW’s Melissa Roberts said Monday.

Private equity firms and sovereign wealth funds will continue to provide capital as banks shy away from mergers on concern that falling home prices will prompt further write-downs, she said.

National City Corp., Ohio’s biggest bank, agreed Monday to sell a $7-billion stake to a group of investors led by Corsair Capital.

Banks and securities firms have raised or announced plans to seek at least $163 billion in capital since July amid losses on sub-prime-related securities. Wachovia Corp., the fourth-largest U.S. bank, sold $7 billion of stock last week; and Washington Mutual Inc., the biggest U.S. savings and loan, got $7 billion of capital from TPG Inc. and other investors this month.

Bank of America may need $7 billion in capital, according to a KBW research note Roberts wrote Friday. Sovereign Bancorp may need as much as $1 billion, the note said.