Bank of America's chief executive, Kenneth D. Lewis yesterday said that the worst was probably over and there would be a slow recovery with growth returning gradually. He added that the financial data support his projection.

In prepared remarks for a conference in London, Lewis said that the free fall indicators had slowed or stopped and cited home prices, sales and increased construction activity in the US as markers that the pace of decline has slowed though the indicators themselves remained low over year-on-year figures. He added that other indicators were actually rising modestly, which included housing affordability and confidence among small business owners.

He said that economists are forecasting a slower rate of recession in the second quarter for the US and the eurozone, modest growth return in second half of 2009 and then a gradual upturn in 2010. He added that unemployment would likely continue and that it would peak around the end of the year or early in 2010.

Lewis also said that consolidation in the banking sector would likely continue, however, Bank of America had no merger plans as it had its hands full. The bank had last year absorbed Merrill Lynch and Countrywide Financial.

Bank of America is expected to generate more revenue, as the economy improved. This would help cover a capital shortfall that the government said the bank was facing after 19 banks had been put through 'stress tests' by the government recently.

The tests revealed that Bank of America needed an additional $33.9 billion, more than any other bank reviewed. The tests had been conducted to determine if the banks needed additional capital to protect against losses if the economy worsened.

In a recent move the bank launched a plan to raise government-required capital through asset sales and stock offers. The bank said it had raised $13.47 billion through the sale of 1.25 billion shares at an average price of $10.77 each. Last week the bank sold part of its stake in China Construction Bank to Asian investor for $7.3 billion. Along with stock sales this saw the bank cross the halfway mark in its capital-raising goal.

The bank received a total of $45 billion in taxpayer aid under the Troubled Asset Relief Program. The program is expected to stimulate the credit markets and boost the economy.

Bank of America stock rose 2.1 per cent to $11.49 in New York Stock Exchange composite trading on reports that it had raised $13.5 billion selling shares. The stock has recovered from less than $3 in February.

Bank of America is California's largest bank. It was founded in 1904 as the Bank of Italy by AP Giannini and was acquired in 1998 by NationsBank. The bank then took the Bank of America name and moved to its present headquarters in Charlotte.