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The article discusses growing perceptions among investors that U.S. bank regulators are urging certain institutions to reduce dividends and raise capital. Among banks thought to be vulnerable for dividend cuts are Wachovia Corp. and Fifth Third Bancorp. On June 12, 2008 KeyCorp announced it would halve its dividend.

The article reports that reductions in loan-loss reserves accounted for much of the profit growth during the third quarter of 2010 for several large U.S. banks including J. P. Morgan Chase & Co. and Fifth Third Bancorp.

The article reports on the higher profit posted by PNC Financial Services Group Inc. Stocks of PNC rose 5.49 U.S. dollars or 13 percent, to 50.65 U.S. dollars in the New York Stock Exchange composite trading. Information on the business losses of Fifth Third Bancorp and SunTrust Banks Inc. is presented.

The article reports that the pace of loans going bad at PNC Financial Services Group Inc. and Fifth Third Bancorp has slowed during the second-quarter of 2009. Net income of PNC fell to 207 million U.S. dollars compared with 517 million U.S. dollars during the same quarter in 2008. However, Fifth Third posted a profit of 882 million U.S. dollars or 1.15 dollars per share. PNC chief financial officer (CFO) Richard Johnson said that the company expects its provision for loan losses to remain flat in coming quarters.

The article discusses an apparent lack of concern among investors over the health of large banks in the U.S. Even though both Fifth Third Bancorp and Regions Financial Corp. could be compelled to convert preferred shares held by the U.S. government into common shares, the stock of both banks rose sharply on May 4, 2009.

The article reports that according to analysts and investors, banks with large portfolios of commercial real-estate loans are most likely to find themselves at the center of investigation as a result of the stress tests by federal regulators in the U.S. Jeff Davis of Howe Barnes Hoefer & Arnett Inc. suspects that Regions Financial Corp. and Fifth Third Bancorp. will be told they should raise more capital. Regulators are reportedly expected to force several banks to raise additional capital due to their performance on the government's stress tests.