Troubled regional Financial Fifth Third is looking to sell assets along with cutting its dividend and raising capital in order to shore up its balance sheet. The company announced it was looking into asset sales when it announced its dividend cut and capital raising intentions. However, Barron’s has a piece today speculating on just which assets those could be.

This from the Financial Post.
The note from Blackmont analyst Brad Smith followed news late on Friday that Moody’s Investors Service had downgraded XL Capital Assurance. CIBC has exposure to XL Capital since the bond insurer provides it with guarantees on some investments.
“Based on this downgrade and XLCA’s credit default swap spreads … we expect CIBC [...]

The Washington Post has a story on regional and healthy banks that I highly recommend. Essentially, we are past the first wave of writedowns and are moving into phase two where it won’t be about derivatives and RMBS’s as much as underlying loan losses and collateral damage in commercial property and construction loans. [...]

and cut dividend.
Regionals across the country are now suffering. The second leg down for financials has truly begun. I warned on Fifth Third this past Thursday in What’s happening at Fifth Third?
See new story here.
Update:
9:19 EDT
Fifth Third to raise $2 billion in capital, replaces chairman, MarketWatch, 18 Jun 2008
Fifth Third Cuts Dividend, Looks to [...]

From Bloomberg News:
Regional Banks Tumble
Zions, the lender with operations in 10 Western U.S. states, tumbled 10 percent to $33.44 for the steepest decline in the S&P 500. “Weakness” in residential construction and land values in the Southwest will harm loans and is “expected to persist into 2009,” the lender said in a presentation attached to [...]

Regional banks have not suffered the writedowns suffered by the major banks and investment banks due to their lack of derivatives exposure. But, loose lending standards are starting to bite. The LA Times has an excellent story out, which details how the community or regional banks will be affected by the housing slowdown. [...]

This morning, I posted a blog entry regarding KeyCorp’s wise decision to cut its dividend and to raise capital. They paid the price in the market today, sinking to a 17-year low below $12.00 a share and down 24% on the day.
Shares of KeyCorp sank to the lowest level in almost 17 years, following [...]

Fifth Third, the Cincinnati-based regional lender, has been tanking of late. Today, it was down another 4% to close at a 12-year low.
“Shares of Fifth Third Bancorp touched a 12-year low Thursday as capital concerns continued to swirl around the banking sector.
The stock fell 65 cents, or 4.2 percent, to close at $14.69, after [...]

The latest move by a regional bank comes from KeyCorp, based in Cleveland. In order to preserve capital ahead of the impending troubles headed for the regionals, KeyCorp has taken the prudent step of both raising capital and cutting its dividend.
KeyCorp on Thursday said it would raise about $1.5 billion in new equity and [...]

Michael Panzner has a good post on his site about regional banks being the next front in the Credit Crisis. He mentions home equity lines (HELOCs) as a crucial piece there, referring to an article in the Financial Times. His blog entry mentions 10 banks, regional and national to scrutinise in particular: Huntington [...]