Results of Stress tests - who sailed through and who needs more capital

The results of the SCAP were out on 7th May 2009 and the 19 Bank Holding Companies will require an additional 74.6 billion dollars to make the financial system sail through without collapse if the economic situation worsens.
Here's the summary of results:

Bank	Additional capital needed (billion dollars)
AmEx	0
BofA	33.9
BB&T	0
BNYM	0
CapOne	0
Citi	5.5
FifthThird	1.1
GMAC	11.5
Goldman Sachs	0
JPMC	0
KeyCorp	1.8
MetLife	0
Morgan Stanley	1.8
PNC	0.6
Regions	2.5
State Street	0
SunTrust	2.2
US Bancorp	0
Wells Fargo	13.7
Total	74.6

52 Banks in America failed in last one year

According to the data by FDIC(Federal Deposit Insurance Corporation) 52 banks have failed in the last one year, one failure per week on an average. This, once again, highlights the gravity of the crisis, and its impact on the financial institutions across the United States.

Month	No. of banks failure
Apr-09	8
Mar-09	5
Feb-09	10
Jan-09	6
Dec-08	3
Nov-08	5
Oct-08	4
Sep-08	3
Aug-08	3
Jul-08	3
May-08	2
Total since May 2008	52

These banks combined had an asset size of 388 billion USD. The failure had cost about 2 billion dollars to the FDIC Deposit Insurance Fund.

Washington Mutual was the biggest of them all with 307 billion dollar assets in its balance sheet. Before the failure it was the sixth largest bank in US. The panic started in Washington Mutual when about 16 billion dollars were withdrawn from the bank during 10 day bank-run. This was about 9% of the size of the total deposits in the bank. However, the pain was avoided by the sale of the bank to JP Morgan Chase (JPMC). This failure was the largest in the history of America.

The second biggest bank to fail during the year was IndyMac Bank with 32 billion dollars of assets. This was the fourth largest bank failure in American history. The failure cost FDIC about 9 billion USD.

About FDIC
"The Federal Deposit Insurance Corporation (FDIC) preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for at least $250,000; by identifying, monitoring and addressing risks to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a bank or thrift institution fails."

Fed Stress test for 19 biggest US Financial Institutions

US Federal Reserve is putting the 19 biggest US financial institutions under stress test to check their stability if the economic situation worsens. Those under the stress test along with their P/E and market capitalization as on 24 April 2009 are listed below:

Name of Finanical Institution	P/E	Market Cap (Billion USD)	Code
J.P. Morgan Chase & Co.	58.6	125.4	JPM
Wells Fargo & Co.	7.8	90.8	WFC
Goldman Sachs Group	27.1	61.0	GS
Bank of America Corp.	12.0	58.2	BAC
US Bancorp	16.5	33.4	USB
Bank of NY Mellon Corp.	27.4	30.9	BN
American Express Co.	13.3	29.3	AXP
MetLife	6.4	24.0	MET
Morgan Stanley	-	23.8	MS
PNC Financial Services Group	18.0	19.2	PNC
Citigroup	-	17.6	C
State Street Corp.	9.4	16.1	STT
BB&T Corp.	9.7	13.1	BBT
Capital One Financial Corp.	-	7.5	COF
SunTrust Banks Inc.	18.3	5.7	STI
Regions Financial Corp.	-	3.9	RF
Keycorp	-	3.5	KEY
Fifth Third Bancorp	-	2.1	FITB
GMAC LLC	-	-

The stress test which is aimed at assessing the capital adequacy of the major financial institutions under various scenarios comes under the SCAP (The Supervisory Capital Assessment Program). The banks that perform poorly under this stress test will be asked to increase their capital and will come under pressure from the investors. Fed has also released a 21 page document stating the methodology which it will use for the stress testing these institutions. The results of the test will start coming after May 4, 2009. One reason behind Fed stating the methodology 10 days in advance is to prevent any shock to the investors. The press release about the methodology was done about an hour after the closing of the US market for the weekend, thus giving analysts time to analyse and digest the information.

Resources:
The Fed's press release
The Fed's stress testing methodology

How Indian investment banks and brokerage firms performed on stock market during financial crisis

Amid the stock market crash lets look at how the Indian investment and brokerage firms fared. Below is the list of main companies in this category along with their one year high and low prices. The Price column shown the current market price (as on 17 January 2009).

	52Week High	52Week Low	Price
Apollo Sindhoori	77	25	52
Centrum Capital	1,839	722	1,625
Edelweiss Capital	1,508	234	239
Emkay Global	401	24	32
Future Capital	1,190	125	157
Geojit Fin Serv	132	20	24
IL & FS Investmart	227	58	65
India Infoline	344	34	46
Indiabulls Securities	300	17	19
JM Financial	137	17	21
Motilal Oswal	379	48	63
Religare Enterprises Limited	650	275	321

The table below shows an estimate of variation between their year high and low prices. We have presented the percentage of fall in share price occurring when the prices fell from year high to reach the year low price.

	Variation
Religare Enterprises Limited	-58%
Centrum Capital	-61%
Apollo Sindhoori	-68%
IL & FS Investmart	-74%
Edelweiss Capital	-84%
Geojit Fin Serv	-85%
Motilal Oswal	-87%
JM Financial	-88%
Future Capital	-89%
India Infoline	-90%
Emkay Global	-94%
Indiabulls Securities	-94%

Finally, lets look at how much these stocks have fallen from their highs to current levels and what percentage have they risen from their

	Fall from highs	Rise from lows
Centrum Capital	-12%	125%
Apollo Sindhoori	-32%	108%
Religare Enterprises Limited	-51%	17%
IL & FS Investmart	-71%	12%
Geojit Fin Serv	-82%	20%
Motilal Oswal	-83%	31%
Edelweiss Capital	-84%	2%
JM Financial	-85%	24%
India Infoline	-87%	35%
Future Capital	-87%	26%
Emkay Global	-92%	33%
Indiabulls Securities	-94%	12%

With an exception of Centrum Capital and Apollo the entire sector has seen huge decline in its market value. Most of the stocks have fallen by more than 80% from their year highs.