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Goldman identifies banks it sees paying off TARP soonest
By Greg Morcroft
Last update: 8:39 a.m. EDT March 11, 2009Comments: 8
NEW YORK (MarketWatch) -- Analysts at Goldman Sachs on Wednesday identified a group of banks that they say are in good capital shape and are likely to pay off government TARP money ahead of rivals. They suggested clients buy a basket of those stocks, while selling the broader KBW Bank Index (BKX:
22.65, +3.05, +15.6%) . Goldman's basket includes Bank of New York Mellon (BK:, , ) , JPMorgan Chase (JPM:, , ) , Morgan Stanley (MS:, , ) , US Bancorp (USB:, , ) , Northern Trust (NTRS:, , ) , First Horizon ( (FHN:, , ) , Comerica (CMA:, , ) , and City National (CYN:, , ) . "While we think the regional banks, First Horizon, Comerica and City National, are likely to repay TARP in 2010 rather than 2009, these are banks with the most tangible common equity," the analysts said. They said that Wells Fargo (WFC:, , ) is not included in their because, "while it is relatively more healthy and certainly wants to repay TARP, Tier 1 ex-TARP is less than 6%. State Street (STT:, , ) is also not included, as tangible common equity is only 1.2% at 2008 year end pro forma for conduit consolidation."