PNC and PFC Banks Will Repay TARP Funds Next

Bank of America’s announcement today that it will repay $45 billion to the government will have two major effects on the banking industry, says a DB analyst.

Matt O’Connor, an analyst at Deutsche Bank, writes in his latest report that BAC’s repayment will spur other banks to raise common to repay TARP. The first two, he predicts, will be PNC and PFC. More will follow.

As an overall industry, he says, the result will be that banking shares will not do as well as hoped.

Citi shares, however, will likely benefit. O’Connor’s report predicts that a sale of the government’s stake in Citi is now closer to happening.

The sale would be great for Citi shares, he says.

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