Analyst: SunTrust should merge with Regions
Memphis Business Journal
SunTrust Banks Inc. should “seriously consider” a merger with Regions Financial Corp. or BB&T Corp., according to an analyst’s report from Ladenburg Thalmann & Co. Inc.
The analyst, Richard Bove, who is based in Lutz, N.C., said in the report issued Thursday that Atlanta-based SunTrust (NYSE: STI) loan losses seem to be accelerating, not declining, because of problems with Florida real estate.
He also said Regions (NYSE: RF) and BB&T (NYSE: BBT) need more than the U.S. Treasury Department’s capital purchase program to jumpstart their recoveries. On Oct. 27, SunTrust asked the U.S. Treasury for some $3.5 billion in capital and cut its dividend by 30 percent.
Bove said in his report that SunTrust has been actively selling assets in the past nine months to redefine the bank, increase capital and offset growing loan losses. He said the bank is “treading water” and “cannot seem to get itself in a forward mode.”
One year ago, SunTrust began a cost-cutting initiative that Bove and other analysts said at the time would determine whether the bank could remain independent.
SunTrust's profit dipped about 26 percent in the third quarter, as the company weathered the challenging credit environment and had rises in net charge-offs, nonperforming loans and credit-related expenses. It had net income of $307.3 million and earnings of 88 cents a share, compared with net income of $412.6 million and earnings of $1.18 a share in the third quarter of 2007.
Revenue rose 20.7 percent to $2.5 billion.
Total assets were down 0.6 percent to $174.8 billion.
Related Industry News |
Latest News |
Most Viewed Stories |
Most Emailed Stories |
