Barclays Maintains an 'Underweight' on SunTrust Banks (STI); TARP Repayment Clears the Path for New CEO (& Independence)

Barclays maintains an 'Underweight' on SunTrust Banks (NYSE: STI), PT $30.

Barclays analyst says, "Excluding the non-cash charge tied to TARP repayment, 1Q11 results for STI came in better than expected on a lower provision and NIM expansion. Its announcement of new leadership sets an orderly transition as current CEO Jim Wells moves into retirement. Still, organic loan growth remains elusive (it has resorted to buying portfolios) and further NIM expansion near-term may be tough to come by. We look forward to capital redeployment plans from the new CEO later in the year. Additionally, while STI has consistently been the subject of takeover speculation (recently in a Bloomberg article titled "Canadian Banks May Buy SunTrust (NYSE: STI), Zions (Nasdaq: ZION) in 'Fire Sale,'" 1/11/11), we note a new CEO rarely sells. Of note, STI is the only top 10 bank by market cap in 1990 that hasn't sold."

For more ratings news on SunTrust Banks click here and for the rating history of SunTrust Banks click here.

Shares of SunTrust Banks closed at $27.10 yesterday.

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