Tier 1 capital ratio disclosure to put Goldman on top - Whitney

jueves 5 de junio de 2008 20:05 CEST
 

June 5 (Reuters) - Wall Street investment banks are likely to disclose Tier 1 capital ratios for the first time when they report quarterly earnings in two weeks, a new metric that is likely to put Goldman Sachs (GS.N: Cotización) at the top of the industry, influential analyst Meredith Whitney said.

Whitney, an analyst at Oppenheimer & Co, does not expect any of the firms to be under-capitalized. She sees their Tier 1 capital ratios in a range of 8 percent to 11 percent, placing Merrill Lynch MER.N at the bottom of the group.

The analyst believes the brokers are broadly overvalued and disclosure of the ratios could provide investors additional insight into their balance sheets.

"In sum, with these new disclosures, capital will once again be at the forefront of investors' minds over the next six weeks," said Whitney, who shot to prominence last year after pointing to Citigroup's (C.N: Cotización) deepening credit losses and correctly predicting it would cut its dividend and go on a capital-raising spree.

She said it was in the best interest of financial companies to remain well capitalized. "With continued industry headwinds, we expect the potential for continued capital raises throughout this year and potentially into next." (Reporting by Akshay Lodaya in Bangalore; Editing by Pratish Narayanan)