There is no love lost between the FED and BB&T. I can't believe that the government can get away with this stuff... Qualitative Assessment! = Government can do whatever it feels like! And, icing on the cake - BB&T can't even disclose the arbitrary nature of the government intrusion. End the Fed!
“BB&T’s capital plan was objected to based on a qualitative assessment,”
"The Fed does not permit bank holding companies to disclose confidential supervisory information including any reason for an objection to capital plans submitted in the Comprehensive Capital Analysis and Review (CCAR) process."
So Kelly King get a 50% pay raise from last year, but his bank can't pass the federal stress test. Amazing that 14 other banks could pass the test. Bet the BOD has a good answer for the shareholders on this.
BB&T Corp. (BBT), North Carolina’s second-biggest bank, had its capital plan rejected by the Federal Reserve after the lender altered its calculation of some assets.
“BB&T’s capital plan was objected to based on a qualitative assessment,” the Fed said today in a report detailing the results of its annual stress tests. The Winston- Salem-based lender can’t implement its requested capital plan and must resubmit the proposals after the “deficiencies” are fixed, the Fed said.
BB&T, led by Chief Executive Officer Kelly King, 64, said March 4 it had reevaluated how to calculate risk-weighted assets and determined changes were needed to meet regulatory guidance, the Fed said today. The adjustments led to an increase in such assets and a decrease in BB&T’s risk-based capital ratios, according to the Fed’s report.
Under its proposed capital plan, BB&T would have a Tier 1 common ratio of 7.76 percent in a stressed scenario, the Fed said today. That number doesn’t reflect the increase in risk- weighted assets or the decrease in BB&T’s risk-based capital ratios, according to the report.
Qualitative failures could include faulty corporate governance or risk-management processes, inadequate underlying assumptions about the capital plan, an unsafe capital distribution or unresolved supervisory issues, the Fed said in the report.
Remember bonuses and raises for upper mgt are for great performance.
Big pay raise and bonus for upper mgt and bank fails stress test, poor performance, do I smell collusion?
If not the B of D's should repeal raise and bonus.
Sorry, that was the fed capital plan not the stress test which to my thinking should mean about the same thing bottom line..Still no worry for the shareholders as Kelly King, management and BOD got theirs.