Deutsche Bank Survey Shows GS, JPM, USB Can Raise Common Equity; C, FITB, HBAN, MI, RF May Have Trouble

Analysts at Deutsche Bank issued results on a interesting survey, asking investors which banks would likely be able to raise common equity in the open market if needed and at how much of a discount.

According to the results of DB's survey 94% of bank investors think that Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM), and US Bancorp (NYSE: USB) would be able to raise additional common equity in the open market if needed.

On the other hand, investors think banks least likely to be able to raise common in the open market are Citigroup (NYSE: C) (42% thought it was unlikely they could raise common), Fifth Third (Nasdaq: FITB) (52%), Huntington Bancshares (Nasdaq: HBAN) (74%), Marshall & Ilsley (NYSE: MI) (54%) and Regions Financial (NYSE: RF) (52%).

Deutsche Bank said their math confirms media reports that Bank of America (NYSE: BAC) will need $35 billion in additional capital buffer and suggests Wells Fargo (NYSE: WFC) will need $14 billion. They also find that SunTrust (NYSE: STI) may need $1.9 billion, KeyCorp (NYSE: KEY) may need $1.5 billion and Fifth Third (Nasdaq: FITB) may need $1.5 billion.

The firm notes raising capital through the issuance of common equity is one option, but banks can also fill any capital holes by reducing their balance sheet, selling businesses, converting preferred equity to common (either TARP or non-government preferreds) and possibly simply converting TARP to CAP (without then converting CAP to common).

Below are the results of their survey (Source: Deutsche Bank) - Scroll Down

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