Wednesday, May 6, 2009

Stress Test Results Show Capital Needs at Wells Fargo, GMAC

Posted on Bloomberg by Rebecca Christie:

Regulators’ stress tests on the 19 largest U.S. banks showed Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and GMAC LLC are among the firms needing to strengthen their buffers against potential losses over the next two years.

Bank of America has the biggest shortfall, at $34 billion, according to people familiar with the matter. Citigroup’s requirement for deeper reserves to offset potential losses over the coming two years is about $5 billion, people with knowledge of that bank’s results said. Wells Fargo requires about $15 billion, while GMAC’s need is $11.5 billion, one person said.

The Federal Reserve and other regulators said today that banks that have to bolster their capital will have until June 8 to develop a plan. Goldman Sachs Group Inc., MetLife Inc., JPMorgan Chase & Co., Bank of New York Mellon Corp., American Express Co., BB&T Corp. and Capital One Financial Corp. were deemed not to need additional funds, the results show.

“The results will be, on balance, reassuring,” Treasury Secretary Timothy Geithner said in an interview with PBS’s Charlie Rose program scheduled to air tonight.

Morgan Stanley may need between $1 billion and $2 billion, according to people familiar with the matter. Earlier today, Bloomberg News reported that Morgan Stanley needed no new capital, citing a person familiar with the matter. Any capital requirement would result from Morgan Stanley’s plans to pay $2.7 billion to take control of Citigroup’s Smith Barney brokerage venture, one of the people said.

Here's a tabulation from Calculated risk:

NameTotal Assets (Billions)Stress Test Results
1. Bank of America2,500Needs $34 billion
2. JPMorgan Chase2,175Pass
3. Citigroup1,947Needs $5 billion
4. Wells Fargo1,310Needs $15 billion
5. Goldman Sachs885Pass
6. Morgan Stanley659Needs $1.5 billion
7. MetLife502Pass
8. PNC Financial Services291???
9. U.S. Bancorp267???
10. Bank of New York Mellon238Pass
11. GMAC189Needs $11.5 billion
12. SunTrust189???
13. State Street177Needs $$$
14. Capital One Financial Corp.166Pass
15. BB&T152???
16. Regions Financial Corp.146Needs $$$
17. American Express126Pass
18. Fifth Third Bancorp120Needs $3.3 billion (1)
19. KeyCorp105Needs $3.3 billion (1)


(1) Citi estimate.

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