UPDATE 2-Regions only major bank that may fail test - analyst

viernes 24 de abril de 2009 17:11 CEST

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BANGALORE, April 24 (Reuters) - Regions Financial Corp (RF.N: Cotización) may be the only major bank that fails to pass the U.S. government's "stress test" and is also at risk of having to raise more equity, analysts at Oppenheimer said, and shares of the bank fell as much as 12 percent.

Oppenheimer's analysis comes ahead of a government briefing of banks on their performance on the stress tests it is conducting on the 19 largest U.S. banks to assess how much capital they might need if the economy sags further.

On Friday, regulators are set to start discussing their findings with the banks. U.S. officials will also outline publicly the process they followed. The final results will be announced on May 4.

Oppenheimer analysts, including Chris Kotowski, said they based their analysis on the stress test criteria reported by the Wall Street Journal on Wednesday.

According to the Journal report, banks would have to project two-year loss rates of up to 8.5 percent for first-lien residential mortgages, 11 percent for home equity loans, 12 percent for commercial real estate, 20 percent for credit cards, and 8 percent for commercial and industrial loans.

Regions did not immediately return a call seeking comment.

Earlier this week, Regions posted a 92 percent drop in first-quarter profit, but said its capital ratios remain strong with a Tier 1 ratio of 10.37 percent. [ID:nN21447484]

Shares of the Birmingham, Alabama-based Regions were down 8 percent at $5.36 in morning trade on the New York Stock Exchange. Earlier, they hit an intra-day low of $5.11.   Continuación...