Chris Marinac, an analyst at FIG Partners in Atlanta, said he doesn’t expect SunTrust to return to profitablity until 2011. But he said SunTrust is doing what it must to climb out of the hole it’s in.
Marinac said his research shows SunTrust will suffer loan losses of $12.6 billion during the current cycle running from 2007 through 2011. Through the second quarter, the bank has taken about $5.1 billion in losses.
But he’s confident SunTrust will weather the storm.
“I think the company has the earnings and the capital to work though” the losses, he said.
SunTrut executives said there are some early indications that things may be turning around. The bank reported an increase in deposits and a drop in the rate of loans going bad.
“Though we’re obviously not pleased to report a loss for the quarter, we are encouraged by this quarter’s results,” Wells said.