KeyCorp (KEY:US), Zions Bancorp (ZION:US) and SunTrust Banks Inc. (STI:US) were among the biggest gainers in the Standard & Poor’s 500 Index on speculation lenders will benefit from an improving U.S. economy.
KeyCorp, based in Cleveland, climbed 5 percent at 4:15 p.m. in New York, the highest price since November 2008 and the third-best performer in the index, which gained 1 percent. Zions, which has its headquarters in Salt Lake City, advanced 4.3 percent to $30.97, and SunTrust, based in Atlanta, jumped 4.2 percent to $34.31.
U.S. employers added 195,000 workers last month, beating the median forecast of 165,000 in a Bloomberg survey and pushing the yield on 10-year U.S. notes 23 basis points higher. The jobs numbers are indicative of “improving economic momentum,” which could help boost loan growth, said Marty Mosby, an analyst at Guggenheim Securities LLC.
“These banks are generally more levered to economic growth,” Mosby said of KeyCorp, SunTrust and Zions today in an e-mail.
JPMorgan Chase & Co. (JPM:US), the largest U.S. lender, and Bank of America (BAC:US) Corp., the second-biggest, increased 2.3 percent and 1.8 percent, respectively. Gains in larger banks have been hindered by the prospect of stricter capital rules scheduled to be decided next week, said Gerard Cassidy, an analyst at RBC Capital Markets.
Basel III, the Basel Committee on Banking Supervision’s latest set of global standards, requires banks to hold loss-absorbing capital equal to 3 percent of total assets, known as a leverage ratio. The U.S. is considering doubling that requirement for its largest lenders, people familiar with the talks have said. The Federal Deposit Insurance Corp. added a vote on “enhanced supplementary leverage ratio standards” to its July 9 meeting agenda.
“There’s going to be a distinct difference between the regionals and small banks and the too-big-to-fail banks and the amount of capital they have to carry,” Cassidy said today in a telephone interview. “That unknown is affecting the relative performance.”
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