The US government began informing the 19 banks tested by the government late on Tuesday about how much fresh capital they need to withstand the economic downturn. The Federal Reserve is expected to release the full report on Thursday after the stock market closes.
It is expected that 10 of the banks that were tested may need capital. JPMorgan, American Express, Goldman Sachs and Bank of New York Mellon won't need to raise more money to shore up their balance sheets, according to analysts.
BofA needs nearly $35bn of capital to survive a worsening recession, according to people familiar with the matter. The Charlotte-based bank received $45bn in capital from the federal government under the Troubled Asset Relief Program, or TARP.
Citi, one of the hardest hit US banks since the credit crisis peaked last October, will have to raise between $5bn and $6bn in extra capital. The move could decrease the government's stake in Citi, which is expected to be about 36% when its preferred shares are converted to common stock. The New York-based bank also received $45bn in TARP funds.
Wells Fargo needs $15bn, a person familiar with the matter said. The San Francisco-based bank received $25bn from the government.
Morgan Stanley was asked by the Federal Reserve to bolster its capital by $1.5bn, according to reports. The firm took $10bn of TARP money.
Analysts believe other banks that may need capital include Fifth Third Bancorp, KeyCorp, PNC Financial Services Group and SunTrust Banks. Others still left to report include BB&T Corp., Capital One Financial, and US Bancorp.
The tests weren't restricted to traditional banks. GMAC LLC may have to raise as much as $11.5bn of additional capital, according to news reports. However, MetLife isn't expected to need more capital.