SunTrust CEO: Worst may be over
The Atlanta Journal-Constitution
While the recession may be at or near an end, the climate for the nation’s banks will remain difficult for some time to come, the top executive of Atlanta-based SunTrust said Monday.
“The industry is a long way from declaring any sort of victory,” SunTrust Chairman and Chief Executive James M. Wells III told the Atlanta Rotary Club.
But Wells said the worst appears to be over.
“As an industry, we’ve moved from facing a potentially cataclysmic scenario to one that is merely very, very difficult,” he said. “That’s an improvement.”
The mounting number of bank failures -- 18 in Georgia this year and 81 nationally -- is a “sobering statistic” that illustrates the industry’s struggles, Wells said.
Many banks are working through soured residential real estate loans, the job market is weak and the commercial real estate sector looms as a growing problem, Wells said.
“All you have to do is drive down Peachtree Street and see the empty or near-empty buildings, or pass through any number of suburban shopping centers to encounter vacant storefronts,” he said.
Even if the economy begins to improve over the second half of the year, “commercial real estate conditions will probably continue to deteriorate until 2010,” Wells said.
Wells’ speech touched on many themes he covered in the bank’s recent earnings report. For example, he reiterated the company’s desire to return the $4.9 billion in government funds it received last year as soon as possible.
SunTrust, the nation’s 7th-largest bank, lost $183.5 million in the second quarter, its third consecutive quarterly loss.
“In times like these, basic safety and soundness of banks understandably take center stage,” Wells told an audience that included many of Atlanta’s political and business elite. “I’d like to state clearly and unambiguously and for the record, that SunTrust is strong and safe.”
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