Mon
Oct 27 2008
04:56 pm

SunTrust Banks to receive $3.5B from Treasury

The bank said it plans to use the capital to expand lending and other business capabilities, and may also explore potential acquisitions.

"Our participation in the Capital Purchase Program enhances SunTrust's already solid capital position and will permit us to further expand our business and take advantage of growth opportunities," James M. Wells III, chairman, president and chief executive, said in a statement.

I thought we were bailing out failing banks?

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Brian A.'s picture

The government appears to be

The government appears to be using an means possible to make credit more readily available.

Recall the story a couple weeks ago about how Paulson coerced the big players into signing onto the recapitalization plan, even those who were initially against participation.

Brian A.
I'd rather be cycling.

michael kaplan's picture

i guess that explains why

i guess that explains why i'm getting 2% on my suntrust savings account ..

Russ's picture

1st TN

First Tennessee's holding company (First Horizon) is also getting their slice of the pie, to the tune of $866 million.

I thought we were bailing out failing banks?

I think that was the original panic response, but that plan no longer seems to be operative. According to this and this, it seems that the $700 billion is being targeted at banks that are only weak and wobbly, but not completely failing. They'll be allowed to spend that bailout money buying the banks that are actually failing, no doubt for pennies on the dollar.

~Russ

Tennessee Jed's picture

Bogus Fees

I wonder now that the banks are essentially allowing themselves to be nationalized if we the people can ask them to stop charging to honor their own paper checks? These fees have seemed to be unethical and compounding of the inflation problem by allowing fees to be double collected since the account holders are already paying for this service to hold accounts. That would be like the federal reserve charging to honor each dollar bill, hey wait a dang second they do! Herein lies the inflation problem at its simplest point.

_______________________________________
Trying to not make matters worse.

smalc's picture

explore potential

explore potential acquisitions.

So they are going to buy up some competitors, and become so big that they can not be allowed to fail. We'll be bailing them out later, I suppose. The money should all go to lending, period.

This make me want to reconsider my accounts at Suntrust.

I was at a branch a months ago, just after the subprime mortgage mess began. There was a disheveled, eccentric-looking older guy in front of me. He asked the teller if Suntrust was going to fail. She gave him a patronizing smile and giggle, and said of course not. Everyone else in line smirked as well. I guess the joke was on us.

R. Neal's picture

There was a disheveled,

There was a disheveled, eccentric-looking older guy in front of me.

Hey, that was me!

Haha. Just kidding.

We used to bank exclusively at SunTrust. They were at one time one of the more stable and conservative bigger banks (which showed in the returns on their conservatively managed mutual funds on the brokerage side). Looks like all the big regional banks are struggling now.

MDB's picture

Looks like all the big

Looks like all the big regional banks are struggling now.

There was a Washington Post article a few weeks ago about how some of the small-ish, locally owned banks in the DC area are seeing an influx of new customers, because they're viewed as not likely to be involved in some of the stupider decisions that lead to the recent situations.

The one they focused on was Northern Virginia's Burke and Herbert, which I've noted has at least one branch that you'd swear from its look was a funeral home, not a bank.

smalc's picture

There was a disheveled,

There was a disheveled, eccentric-looking older guy in front of me.

Hey, that was me!

Nah, unless you've gone on a Howard Hughes-like downhill slide.

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