At least three of the 19 largest U.S. banks have passed government stress tests of their financial strength.
American Express Co., JPMorgan Chase & Co. and Bank of New York Mellon Corp. will not be asked to raise more capital when federal officials announce the test results Thursday afternoon, according to people briefed on the results. The people requested anonymity because they were not authorized to discuss the results.
The stress tests were designed to see how the large banks and finance companies would fare if the economy worsens. Analysts expect about half the companies will be asked to raise capital.
Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. all will be asked to raise money, sources have told The Associated Press.
The government says that after the results of the stress tests are released Thursday, the banks found to need more capital will have until June 8 to get a plan approved by their regulators.
The deadline was included in a joint statement released by Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke and Sheila Bair, head of the Federal Deposit Insurance Corp.
Spokesmen for New York-based American Express and JPMorgan would not comment. A Bank of New York Mellon representative did not immediately respond to requests for comment Wednesday afternoon.
Bank of America stock rose Wednesday after reports that the Charlotte, North Carolina-based company would need to raise $34 billion in additional capital. The New York Times and Wall Street Journal reported the figure. The Times quoted a bank executive, while the Journal cited unnamed people familiar with the situation.
The stress tests are a centerpiece of the Obama administration's plan to stabilize the financial industry. They measure how much the banks would be hurt if unemployment rose to 10.3 percent and home prices dropped an additional 22 percent.
The government wants the firms to have enough money to keep lending even if the economy gets much worse. Officials have said none of the banks will be allowed to fold.
Wells Fargo & Co needs $15 billion, Bloomberg News said, citing an unnamed source. Citigroup Inc. may need as much as $10 billion, a person familiar with the matter said. About 10 of the 19 banks that were tested may need capital, a person familiar with the official talks said.
The sources were not authorized to speak because the stress test results are not public.
Analysts believe other banks that may need capital include Fifth Third Bancorp, GMAC LLC, KeyCorp, PNC Financial Services Group Inc., Regions Financial Corp. and SunTrust Banks Inc., according to Reuters.
Among other banks that may not need capital are Bank of New York Mellon Corp and Goldman Sachs Group Inc, analysts said.