Feb 4 (Reuters) - Keefe, Bruyette and Woods downgraded Zions Bancorp to 'underperform' from 'market perform,' saying the bank would need to raise as much as $700 million in common equity before it repays bailout funds.
The brokerage said Zions would be pressured to repay the money it received under the Treasury's Troubled Asset Relief Programme (TARP) as other banks, like PNC Financial Services Group, have already begun to raise capital to repay TARP.
'We believe Zions' shares will be under pressure until the question of its capital adequacy is answered,' the brokerage said in a note to clients.
The brokerage, which raised its price target on Zions' shares to $16 from $15, said the stock has risen 45 percent this year and expects profit taking with the uncertainty surrounding the possible near-term capital raise.
Shares of the Salt Lake City, Utah-based bank closed at $18.62 Wednesday on Nasdaq.
(Reporting by Jochelle Mendonca in Bangalore; Editing by Anil D'Silva) Keywords: ZIONSBANCORP/RESEARCH KBW (jochelle.mendonca@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: jochelle.mendonca.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The brokerage said Zions would be pressured to repay the money it received under the Treasury's Troubled Asset Relief Programme (TARP) as other banks, like PNC Financial Services Group, have already begun to raise capital to repay TARP.
'We believe Zions' shares will be under pressure until the question of its capital adequacy is answered,' the brokerage said in a note to clients.
The brokerage, which raised its price target on Zions' shares to $16 from $15, said the stock has risen 45 percent this year and expects profit taking with the uncertainty surrounding the possible near-term capital raise.
Shares of the Salt Lake City, Utah-based bank closed at $18.62 Wednesday on Nasdaq.
(Reporting by Jochelle Mendonca in Bangalore; Editing by Anil D'Silva) Keywords: ZIONSBANCORP/RESEARCH KBW (jochelle.mendonca@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: jochelle.mendonca.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.