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BB&T Corporation Message Board

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  • matollionequay matollionequay Jun 2, 2009 1:37 PM Flag

    Second Quarter Net Chargeoffs

    Thanks for the fact based analysis. Always appreciated. My sense is that the dividend cut may be part of the government's interfernce that KK has clearly resented if not disparaged. During the conference call before the last one, one of the speakers indicated that the bank could hold that dividend quite comfortably even with a substantial drop in net income. It appears to me that a bank holding Tarp money has to listen. Paying out about 1 billion in dividends annually while holding 3+ billion in government money probably caused someone in the government angst. If you are correct about write-offs, commercial RE loans don't go too badly, and the overall economic picture doesn't topple, cuts in dividends for a year plus the capital raised, plus net income should allow BBT to get out of Tarp and pay dividends as they have historically.

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    • I don't think the dividend will be going up much anytime soon, but if it does, it will be slowly. While most companies were paying around 40% of their profits in dividends, BBT was paying between 50% and 60%. The deleveraging from debt crisis we have been building up for 20 years could take a decade or more to work its way through the system, and banks could be involved with bad loans for another 5 years. I see no relief for financials for a long time. Good luck.

 
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