SunTrust speeds up sale of Coke shares for $1.9 bln gain
Sept 6 |
Sept 6 (Reuters) - SunTrust Banks Inc has accelerated a planned sale of Coca-Cola Co shares it owns in a move that it said will produce a $1.9 billion pre-tax gain and reduce volatility in its capital ratios.
The Atlanta-based regional bank also said it planned to take a $375 million charge in the third quarter to cover requests from Fannie Mae and Freddie Mac to buy back mortgages it sold to the mortgage giants before 2009. SunTrust is also taking $350 million in charges as it sells off a variety of real estate loans.
The actions are expected to increase the bank's third-quarter net income by $750 million, or $1.40 per share, and produce a "modest increase" to Tier 1 common equity, a measure of core capital. SunTrust has owned shares of Coca-Cola since 1919 when a predecessor bank participated in the underwriting of the company's initial public offering and received the shares in lieu of fees.
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