SunTrust Seeks to Move Past TARP
NEW YORK (
) -- New stress tests will determine how soon
SunTrust Bank
(STI) - Get Report
can move past government assistance.
CEO James Wells said regulators have implied the second round of testing, which is expected at the end of the first quarter, will determine when the bank could pay back $4.85 billion it owes the government through the U.S. Treasury Department's Troubled Asset Relief Program (TARP).
"We believe TARP repayment is now wrapped up in
the stress tests. That is the implication
regulators have communicated to us," Wells said during Goldman Sach's US Financial Services Conference 2010.
SunTrust was ordered to raise $2.2 billion after the first stress test in the May 2009. Analysts said SunTrust may need to raise cash through a stock sale before it repays TARP.
The bank has said it is avoiding a stock sale because it would rather not dilute current shareowners' holdings.
SunTrust's Wells said that while it is an opportunistic time for M&A, the bank is focused on organic growth.
"We don't feel like we should do anything radical," Wells said.
--Written by Maria Woehr in New York.
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