UPDATE 1-Lehman sees US large-cap banks' 2008 loss at $79 bln

lunes 9 de junio de 2008 14:09 CEST
 

 (For more on analysts' outlook for U.S. financial
institutions, double click on [ID:nBNG327142])
 (Recasts; Adds analyst comments)
 June 9 (Reuters) - U.S. large-cap banks will likely post
losses of about $79 billion in 2008, with net charge-offs for
the second quarter expected to total $17 billion, said Lehman
Brothers analyst Jason Goldberg, who also cut his 2008 outlook
and price target for large banks.
 Goldberg, who upped his loss estimate for large-cap banks
by about 30 percent, said increased severity on real-estate
related credits was the main driver of higher losses.
 "The deteriorating credit environment and more exotic
assets coming on balance sheets could continue to weigh on
results," Goldberg wrote in a note to clients.
 The analyst widened his 2008 loss estimate for National
City Corp NCC.N and cut his full-year profit estimates for
several large-cap banks, including Citigroup Inc (C.N: Cotización), Bank of
America Corp (BAC.N: Cotización) and JPMorgan Chase & Co (JPM.N: Cotización).
 Credit card losses were rising mainly in housing troubled
states such as California, Florida, Arizona and Ohio, Goldberg
said. He expects reserve additions to slow in the second
quarter, but said they will likely remain elevated.
 Goldberg estimates "total credit costs to be in the
neighborhood of last quarter's $27 billion hit and with
leverage lease hits at some."
 "For the overall coverage universe we have posited that the
industry's dividend could be largely secure, barring something
more than a mild recession," Goldberg said.
 "That said when looking at the three metrics cited, we
would highlight SunTrust Banks Inc (STI.N: Cotización), Wachovia Corp
WB.N, Bank of America, Comerica Inc (CMA.N: Cotización), Fifth Third
Bancorp (FITB.O: Cotización), and KeyCorp (KEY.N: Cotización) as relatively poorly
positioned," he added.
 The following table lists the estimate and price target
changes on large-cap banks:
 COMPANY                        RATING        PRICE TARGET
CURRENT PRICE  2008 EPS VIEW
                                           New   Old    June
6 Close   New    Old
 Bank of America Corp (BAC.N: Cotización)   Equal weight  $45   $47   
$30.50         $2.40  $2.80
 Citigroup Inc (C.N: Cotización)            Overweight    $31   $34   
$20.06         $0.33  $0.40
 JPMorgan Chase & Co (JPM.N: Cotización)    Overweight    $50   $53   
$40.09         $2.70  $3.25
 Wachovia Corp WB.N           Overweight   $31   $34   
$20.13         $1.40  $1.70
 BB&T Corp (BBT.N: Cotización)           Underweight   $36   $37     $28.06
     $2.95  $3.05
 Fifth Third Bancorp (FITB.O: Cotización)   Equal weight  $25   $27   
$16.74         $1.80  $2.02
 First Horizon National (FHN.N: Cotización) Equal weight  $13   $14   
$9.36          $0.10  $0.25
 KeyCorp (KEY.N: Cotización)                Underweight   $23   $25   
$17.30         $1.30  $2.10
 Marshall & Ilsley MI.N       Equal weight  $26   $27   
$21.28         $1.78  $2.05
 PNC Financial Services (PNC.N: Cotización) Equal weight  $70   $71   
$60.98         $4.80  $4.85
 Regions Financial (RF.N: Cotización)       Underweight   $23   $25   
$15.45         $2.05  $2.15
 State Street (STT.N: Cotización)           Overweight    $88   $94   
$68.02         $5.15  $5.18
 SunTrust Banks (STI.N: Cotización)         Underweight   $58   $64   
$46.32         $2.95  $3.05
 TCF Financial (TCB.N: Cotización)          Overweight    $22   $23   
$15.25         $1.52  $1.65
 Bank of New York Mellon (BK.N: Cotización) Overweight    $53   $57   
$41.15         $2.95  $3.00
 Wells Fargo (WFC.N: Cotización)            Overweight    $33   $34   
$25.42         $2.10  $2.20
 Zions Bancorp (ZION.O: Cotización)         Equal weight  $54   $55   
$39.77         $4.30  $4.40
 National City NCC.N          Overweight    $8.50  --   
$4.95         -$0.32 -$0.08
 Comerica (CMA.N: Cotización)               Underweight   $40    --   
$35.31         $2.60  $2.70
 M&T Bank (MTB.N: Cotización)               Equal weight  $93    --   
$81.18         $6.40  $6.60
 Synovus Financial (SNV.N: Cotización)      Underweight   $12    --   
$10.58         $0.72  $0.83
 US Bancorp (USB.N: Cotización)             Overweight    $37    --   
$32.07         $2.45  $2.53 (Reporting by Tenzin Pema in
Bangalore; Editing by Jarshad Kakkrakandy)