4 banks plan stock offerings to repay government loans

NEW YORK -- Four big U.S. banks Monday announced plans to sell more than $6 billion of common stock, in an effort to raise capital and repay funds received under the government's bank bailout program.

The banks were among 19 lenders to undergo government stress tests of their ability to weather a deep economic downturn.

U.S. Bancorp, Capital One and BB&T were among the nine found not to need more capital, while KeyCorp was ordered to raise $1.8 billion. Regulators last week ordered 10 lenders overall, including Wells Fargo and Morgan Stanley, to raise a combined $74.6 billion.

U.S. Bancorp took $6.6 billion from the government's Troubled Asset Relief Program, while Capital One took $3.55 billion, BB&T $3.1 billion and KeyCorp $2.5 billion.

Hundreds of lenders took money from TARP, which was designed to spur lending and improve the economy.

Yet many now view TARP as an albatross that imposes too many restrictions, including on executive pay, and suggests that recipients are desperate for capital.

"Rational, objective lending is one of the most important purposes of the banking system, and when you inject Congress and the administration into it, it effectively politicizes the process, which is not healthy," BB&T Chief Executive Kelly King said in an interview Monday.

King also faulted the stress tests, saying they unnecessarily created "huge levels of anxiety and concern" among investors. "Regulators have always had the ability to assess the capital of institutions, and require more if they chose," he said.