April 25, 2009

Federal regulators on Friday released details about the criteria it used over the past two months to conduct “stress tests” of the nation’s 19 biggest banks, including Atlanta-based SunTrust.But the information, some of which leaked out over the past few days, shed little light on which banks would need additional cash if the economy deteriorates worse than expected.Speculation is running rampant. On Friday, Morgan Stanley released a report saying SunTrust, Georgia’s largest bank, is one of three most likely to be told by the government to raise new funds. The other banks: regional players KeyCorp, based in Cleveland, and Birmingham-based Regions.

Chris Marinac, an anlayst at FIG Partners in Atlanta, said he’s not sure how SunTrust will fare in the government’s assessment.But he said his own firm’s stress tests showed SunTrust has sufficient cash flow to cover loan losses over the next three years. Even if SunTrust doesn’t need new capital, he said it should raise new funds to snap up weaker competitors.It’s a unique, once-in-a-lifetime opportunity to take in new customers,” Marinac said.In the stress tests, federal regulators ran the 19 banks through two economic scenarios, according to a report released Friday by the Federal Reserve.