S&P: Credit Rating for Sun Trust Banks Unchanged Following Q3 Results

October 24 00:00 2011

NEW YORK, October 24 (RainbowNewsLine.com) – Analysts at S&P Rating Services announced that its credit rating on Sun Trust Banks Inc. (NYSE:STI) of (BBB/Stable/A-2) is unaffected by the company’s good Q3 results.

Sun Trust Banks reported an adjusted pretax income of $195 million ahead by $10 million from last quarter. This gain was caused by the release of reserves valuing at $145 million thus resulting in a $45 million drop in loan loss provisions. The credit quality improved gradually as anticipated, NCO declined quarter over quarter, and non-performing assets fell by 2.7%. The company reported a 6.1% decline in adjusted pre-provision net revenue, as net interest income remained flat. The Credit related expenses were inflated and trembling investment banking and core-trading results offset higher mortgage production income, the analysts say.

S&P has affirmed stable rating Sun Trust Banks despite the company’s focus on expense reduction. The bank will find it difficult in boosting revenue, including weak demand for higher-yielding loans and lower investment and retail banking fees, the analysts say.

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