BofA, Citi Must Raise Billions in Capital

Bank of America (BAC) and Citigroup (C) have both been told that they must raise billions of dollars of extra capital, the Wall Street Journal said on Tuesday, citing people familiar with the situation.

From The WSJ: Regulators have told Bank of America Corp. and Citigroup Inc. that the banks may need to raise more capital based on early results of the government’s so-called stress tests of lenders..

The capital shortfall amounts to billions of dollars at Bank of America, based in Charlotte, N.C., people familiar with the bank said.

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Industry analysts and investors predict that some regional banks, especially those with big portfolios of commercial real-estate loans, likely fared poorly on the stress tests. Analysts consider Regions Financial Corp., Fifth Third Bancorp and Wells Fargo & Co. to be among the leading contenders for more capital.

Both, Citi and Bank of America execs are said to be objecting the preliminary findings. The final results of the stress tests are due to be published next week.