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The Zacks Analyst Blog Highlights: BB&T, Capital One Finance, Fifth Third Bancorp, US Bancorp and Wells Fargo

Zacks Equity Research

For Immediate Release

Chicago, IL – November 1, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include BB&T Corporation (BBT), Capital One Finance Corp. (COF), Fifth Third Bancorp (FITB), US Bancorp (USB) and Wells Fargo & Company (WFC).

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Here are highlights from Wednesday’s Analyst Blog:

Fitch Affirms Ratings of 14 Banks


Fitch Ratings has affirmed its Issuer Default Ratings (IDRs) on 14 large regional banks. This follows a thorough review of the peer group.

The banks include BB&T Corporation (BBT), Capital One Finance Corp. (COF), Fifth Third Bancorp (FITB), US Bancorp (USB) and Wells Fargo & Company (WFC), to name but a few.

Based on ratings, the group has been divided into three distinct categories. The first category banks have an ‘AA-‘or ‘A+ rating. The ratings are sustained mainly by these banks’ sturdy earnings profile, sensible risk profiles, consistent performance through the recent financial crisis, and steady earnings growth. Although asset quality of some of these banks deteriorated, sound capital position and reserves absorbed all the losses stemming from it. US Bancorp, Wells Fargo, BBT and PNC fall in this section.

The second category involves banks, which have diverse ratings spanning from ‘A’ to ‘BBB+’. UnionBanCal, Capital One, Comerica, Fifth-Third, KeyCorp, M&T Bank, and Huntington come under this group. According to Fitch, these banks have solid credit profiles, but certain bank-specific aspects keep these away from being on the top. For instance, relatively low earnings mar some companies having strong capital position and in some cases, low capital position offset the strong risk-adjusted earnings.

In the last category, banks having ‘BBB+’ to ‘BBB-‘ratings are included. Zions, SunTrust, and Regions’ belong to this group. As per Fitch, these banks lagged peers in terms of earnings and asset quality performance during the financial crisis, but of late have started displaying improving trends.

Earlier in October, Fitch had reiterated the long and short-term IDR of 12 Global Trading and Universal Bank (:GTUB) peer group (formed last October and includes 13 major securities trading and universal banks). Moreover, excluding one bank, Fitch re-affirmed the respective outlook for all others.

The rating affirmation will prove beneficial to the already stressed financial sector. Further, this will reinforce investors’ confidence in the sector. Also, this might help the financial institutions to withstand another financial crisis.



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