SunTrust reported a loss of $379.2 million, or $1.08 a share, for the fourth quarter compared to a year-earlier profit of $3.3 million, or 1 cent a share. It also slashed its dividend to 10 cents a share.
Analysts, on average, expected the company to post a profit of 7 cents a share, according to Thomson Reuters. Shares were trading down 11.5% to $13.46 on Thursday.
On the other hand, BB&T, one of the few stalwarts throughout the credit crisis, reported a 31% decline in profit available to common shareholders to $284 million, or 51 cents a share. That beat the consensus analyst estimate of 47 cents a share for the quarter, according to Thomson Reuters. Shares recently were down 3.8% to $18.96.The bottom lines of both companies were weighed by provisioning against loan losses. Atlanta-based SunTrust's poor results were fueled by significant credit-related charges that reflected the "dramatic deterioration" in the economy during the fourth quarter, it said. "The fact that SunTrust is not alone in paying the price of a deteriorating economy on our business and our clients does not make today's results any less painful to report," SunTrust's chairman and CEO James Wells III, said in a statement. Wells noted that increased unemployment and continued declines in home values drove loan delinquencies significantly higher during the fourth quarter of 2008, resulting in higher than expected credit losses.
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