A man uses a Bank of America ATM in uptown Charlotte.

Bank of America Corp said it would increase its quarterly dividend to 5 cents per shares from 1 cent per share, its first dividend hike in seven years.

The Federal Reserve approved Bank of America's updated capital plan, which included an increase in common stock dividend but no share repurchases, the company said in a statement on Wednesday.

The bank withdrew its previously planned increase in April after it found errors that reduced a key capital level by $4 billion (R43 billion).

Raising the dividend has been a top priority for chief executive Brian Moynihan.

Prior to the 2008 financial crisis, the bank paid a quarterly dividend of as much as 64 cents per share.

Bank of America's shares rose as much as 2 percent to $15.30 in early trading on Wednesday.

Up to Tuesday's close, the stock had fallen about 2.5 percent this year. - Reuters