Banks Face Capital Punishment

Stock quotes in this article: WM , CFC , WB , NCC , BAC  

Najarian blames the "rapidly deteriorating non-conforming mortgage exposure" Wachovia has in California, as well as "much higher home equity and subprime auto loan losses."

Nonperforming loans at World Savings Bank were 1.19%, up sharply from 0.84% in the second quarter.

World Savings' ratio of nonperforming assets to core capital and reserves was 18.06% -- the third highest of the 20 banks, according to the analysis. (Wachovia Bank's NPA to core capital and reserves was 4.27%.)

With a difficult earnings year expected for 2008, thin capital positions at many banks means difficult decisions -- like WaMu's -- could be ahead for others.

T. Rowe Price's Fortune raised the specter of recession and said banks could really be pressured to raise more capital.

"If we're going into a recession ... more people are going to default on their loans, and the banks are going to get less of their money back in a foreclosure," Fortune says. "That would really put pressure on [banks'] building provisions and that could lead to having to raise more capital."

  • Loading Comments...
  •  
1 2 3 4 5 6
Next >

SHARE:

  • email
  • print
  • comment
  • digg
  • delicious
  • linkedin

Recent Comments





Connect with TheStreet

Dow Jones S&P 500 NASDAQ 10-Year Note
10,405.83 1,102.35 2,190.86 34.82
Oil *
71.98
UP
68.78
UP
6.41
UP
7.13
UP
0.59
10 Yr
3.48%
SPDR Gold
110.82
+0.67%
+0.58%
+0.33%
+1.72%
Data delayed 20 minutes

Brokerage Partners

TheStreet Premium Services

All Services