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UPDATE 1-Collins Stewart raises Synovus Financial to buy
November 15, 2010 / 4:41 PM / 7 years ago

UPDATE 1-Collins Stewart raises Synovus Financial to buy

* Upgrades from neutral

* Says Synovus to unveil cost savings soon

Nov 15 (Reuters) - Synovus Financial Corp (SNV.N) may come up with cost-saving plans to help restore profitability sooner than expected, analysts at Collins Stewart said, upgrading the regional bank to “buy.”

The lender, which has about $35 billion in assets, holds many commercial real-estate and construction loans in some of the worst markets in the country, making credit quality and return to profitability a major concern.

“Our sense is the management is preparing to unveil a specific set of programs designed to eliminate as much as $100 million of costs over the next 18 months, or about 8-10 percent of the estimated 2010 cost base,” analysts led by Todd Hagerman said in a note to clients.

“Management believes the potential cost savings plans are the ‘game changer’ for 2011,” the analysts said.

The brokerage said it hosted a series of meetings with Synovus’ top management, including CEO Kessel Stelling.

The analysts expect significant drop in problem assets and problem-asset inflows in the fourth quarter.

Synovus reported a wider-than-expected loss for the third straight quarter in October. [ID:nSGE69O0K2]

The Columbus, Georgia-based bank’s shares, which have slumped 16 percent since the company reported third-quarter results, were up 3 percent at $2.11 in morning trade on Monday on the New York Stock Exchange. (Reporting by Tenzin Dekeva in Bangalore; Editing by Vinu Pilakkott)

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