JPMorgan Says SunTrust (STI), Bank of America (BAC) And Wells Fargo (WFC) Reserves Are Quite Low
JPMorgan said among the big banks, SunTrust Banks (NYSE: STI) has the least money set aside to cover loan losses and SunTrust may be forced to sell assets or issue preferred stock.
JPMorgan also said that Bank of America (NYSE: BAC) and Wells Fargo (NYSE: WFC) are among lenders with the lowest reserves to cover bad loans. JPMorgan thinks these lenders may raise more money to increase reserves.
Bank of America has lower reserves compared with its peer group, and this will worsen after it buys Countrywide Financial (NYSE: CFC).
Thus far, investment and commercial banks have raised $302 billion to cover losses from the collapse of the U.S. subprime mortgage market, according to data compiled by Bloomberg.
Bank of America Corporation is a bank holding company.
SunTrust Banks primarily operates as a financial services holding company.
Wells Fargo & Company is a financial holding company and a bank holding company.
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