SunTrust net sinks 98 percent on real estate, writeoffs

By Jonathan Stempel

NEW YORK (Reuters) - SunTrust Banks Inc (STI.N: Quote, Profile, Research, Stock Buzz), a large U.S. southeast regional bank, on Wednesday said quarterly profit tumbled a larger-than-expected 98 percent, hurt by a tripling of credit losses and a bailout of money market mutual funds.

The decline reflected what Chief Executive James Wells called "rapid deterioration" in residential real estate, with particular softness in southern Florida and the Atlanta area, and capital markets that were "anything but stable."

Florida and Georgia were two of the five U.S. states with the highest foreclosure totals in November, RealtyTrac said.

Fourth-quarter net income for Atlanta-based SunTrust to $11.1 million from $506.3 million a year earlier. Profit per share fell to 1 cent from $1.39.

Analysts on average expected profit of 22 cents per share, according to Reuters Estimates. Revenue fell 15 percent to $1.74 billion, below the average forecast of $1.91 billion.

"The fourth quarter was disappointing for the industry but even more so at SunTrust," wrote Goldman Sachs & Co analyst Lori Appelbaum. Write-downs were "much bigger than expected," she wrote.

SunTrust is the last of the 10 largest U.S. commercial banks to report fourth-quarter results. All suffered declines in operating earnings or lost money, topped by Citigroup Inc's (C.N: Quote, Profile, Research, Stock Buzz) $9.83 billion loss.

In the fourth quarter, SunTrust set aside $356.8 million for loan losses, up from $115.8 million a year earlier, and nonperforming assets nearly tripled to $1.66 billion.