"In our view the top question on investors' minds will be how much capital does a bank need under precedence set by PNC ... and others in recent months," analysts at FBR Capital Markets said in a research note last week.
The FBR note goes on to say that two schools of thought exist on how much capital is needed to be raised in order to repay TARP funds.
The first requires banks to undergo a common equity raise equal to half the amount of outstanding TARP funds minus half of the capital released from any deleveraging or business divestments, FBR analysts say.
Or it could be that regulators are gravitating that 8% common ratio, even though there have been exceptions, including Bank of America and U.S. Bancorp (USB), according to the FBR analysts.SunTrust Banks (STI), Regions Financial (RF), KeyCorp (KEY) and Fifth Third Bancorp (FITB) all bolstered their balance sheets last May following the stress tests that found capital deficiencies. Yet the FBR analysts say these banks may have to raise extra capital if they want to repay the government's capital injections. "
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