Bank Details may be Officially Released

After reports circulated late last week that Federal Reserve officials gagged various U.S. banks regarding stress test results, the Obama administration is discussing whether to reveal some details about the test results. As a result, certain information about the condition of the top 19 U.S. banks may soon be publicly disclosed, unnamed sources told the New York Times. The Fed told Goldman Sachs Group Inc. (GS), Citigroup Inc. (C) and other major banks not to talk about the results — or even the process — tied to ongoing stress tests at U.S. banks, Bloomberg News reported Friday. Federal examiners continue to crunch numbers at key U.S. banks to determine the ability of each to withstand a lengthy U.S. recession, and investors anxiously await the results. The gag orders on the eve of banks’ earnings season indicate reluctance on the part of regulators to fuel speculation.  Banks perceived as weak due to stress test results may further corrode an already cautious investor base. White House press secretary Robert Gibbs said the government plans to release all stress test results by early May, according to Bloomberg News. Early projections and earnings statements paint a rosy picture of at least some recovery in the U.S. banking sector. Goldman on Monday posted net earnings of $1.81bn — or $3.39 per share — for Q109, up considerably from the $4.97 per share net loss reported in Q408. Strong mortgage performance drove the gain, according to Goldman’s earnings statement. Wells Fargo & Co. (WFC) said last week it expects to post a record net income of $3bn — or 55 cents per share — in its Q109 earnings statement, which is slated for an April 22 release. The expected gain would come after accounting for $372m in dividends paid to the Treasury on its TARP capital investment. JP Morgan Chase & Co. (JPM) is slated to release its Q109 earnings Thursday, while Citigroup plans to release its Q109 earnings before market open Friday. Write to Diana Golobay at Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

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