March 14, 2012 / 8:43 PM / 5 years ago

TEXT-S&P: SunTrust Banks ratings unaffected by Fed Review

March 14 - Standard & Poor's Ratings Services today said that its
ratings on SunTrust Banks Inc. (BBB/Stable/A-2) are not affected by the
Federal Reserve's objection to portions of the bank's 2012 capital plan.	
	
On March 13, 2012, the Federal Reserve released the results of its 2012 	
comprehensive capital analysis and review (CCAR). Under its hypothetical 	
stressed scenario, the Fed projected that SunTrust's Tier 1 common capital 	
ratio would fall below the 5% minimum threshold if SunTrust adopted its 	
proposed capital plans. The company has not disclosed what those capital plans 	
were. However, the result assuming no capital actions indicates that SunTrust 	
planned to return to shareholders capital equaling roughly 0.7% of 	
risk-weighed assets, which was less than most of its regional banking peers. 	
Following the results, the bank announced that it expects to maintain its 	
dividend at $0.05 per share and that it will continue to redeem trust 	
preferred securities.	
	
We view SunTrust's risk position as "moderate," reflecting the bank's exposure 	
to the troubled southeast housing markets and its relatively high 	
nonperforming loan ratio. Our assessment of capital, which remains "adequate," 	
incorporates the bank's modest profitability and continued redemption of trust 	
preferred securities. Bank holding companies are required to revise and 	
resubmit their capital plans within 30 days if the Federal Reserve objects to 	
the plan. Therefore, we will reassess our view of SunTrust's capital position 	
once the results and details of its resubmission become clear.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below