Report: Billions more needed to float banks
By Andrew Coen
June 18, 2008, 2:32 PM EST
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The U.S. financial services industry may have to lay hold of $65 billion on top of the $120 billion already raised to keep afloat amid losses incurred due to the global credit crunch, according to a report from The Goldman Sachs Group Inc.
“Timing the Turnaround: Credit, Capital, Consensus and Curve” stated that the performance of U.S. banks will not rebound until the worst of the credit crisis is in the rearview mirror. Goldman Sachs analysts forecast that won’t occur until next year.
New York-based Goldman Sachs lowered its price targets for 14 investment banks and cut its 2008 earnings-per-share forecasts for 11.
The financial services companies who had both their price targets and earnings forecasts cut by Goldman Sachs analysts were: Winston-Salem, N.C.-based BB&T Corp., Pittsburgh-based PNC Financial Services Group Inc., Atlanta-based SunTrust Banks Inc., Minneapolis-based U.S. Bancorp and San Francisco-based Wells Fargo & Co.
In the three quarters since the credit meltdown began, U.S. banks and savings and loan companies have set aside $86 billion for loan losses, according to the Goldman Sachs analysts.
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