BofA, Citi Frantic To Raise Capital

Officially, the results from the stress test aren’t due to be released until Thursday, but the two big losers — Bank of America (BAC) and Citigroup (C) are still frantically trying to either raise cash or convince the Fed that they don’t need to.

Citigroup would rather not have the Treasury convert more of its preferred shares to common, a move that would give the government a greater than 50% stake in the bank. One possibility, says Bloomberg, would be for Citi to convince other, non-governmental preferred shareholders to convert about $10 billion worth.

BofA needs even more than $10 billion. It’s likely that they could do some kind of conversion as well, though for now it sounds as though their main focus is on convincing the government that it’s wrong.

FT says the other banks that could need significant amounts of capital are Wells Fargo (WFC) and PNC (PNC). Well Fargo is a particularly interesting case, since it’s a big Buffett holding. Not only does Buffett claim strong faith in Wells, but he’s also lashed out at the stress tests, as well as the focus on Tangible Common Equity as being the key focus.

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