With the results of the bank stress tests looming this afternoon, many people are wondering what the results will hold for the 19 tested banks. One of the banks tested but not named as much is Fifth Third Bancorp (NASDAQ: FITB); its results are of major interest in my hometown of Cincinnati, Ohio.
In the electronic version of the local fishwrap (The Cincinnati Enquirer), Erik Oja from Standar & Poor's was interviewed about FITB's situation. Oja contends that "Fifth Third will be required to raise capital ... How much is the issue."
Bank officials wouldn't comment on Oja's contention, but it is widely believed that 10 of the 19 banks tested will need to raise capital. Fifth Third could be required to raise as much as $1.9 billion, but it should benefit from the pending transaction to sell 51% of its processing unit -- which could net the company $1.2 billion in capital.
The company was pointed higher in pre-market trading, thanks to an upgrade from KBR Capital Markets, and shot up 16% after the bell this morning. The brokerage upped FITB to "outperform" from "market perform" and doubled his target price for the stock to $8. KBR believes that the bank will be able to raise the capital likely required by the government's stress tests.
This bank could use some good news, as it has spent the better part of the past two years in a massive downtrend. Since the middle of March, the equity has managed to march higher, emboldening some investors. Let's see if the speculation about the stress tests comes to fruition and if FITB can continue its uptrend after the results are released.
The company was pointed higher in pre-market trading, thanks to an upgrade from KBR Capital Markets, and shot up 16% after the bell this morning. The brokerage upped FITB to "outperform" from "market perform" and doubled his target price for the stock to $8. KBR believes that the bank will be able to raise the capital likely required by the government's stress tests.
This bank could use some good news, as it has spent the better part of the past two years in a massive downtrend. Since the middle of March, the equity has managed to march higher, emboldening some investors. Let's see if the speculation about the stress tests comes to fruition and if FITB can continue its uptrend after the results are released.
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