SunTrust Banks Inc., the 10th-biggest U.S. bank, said first-quarter profit dropped 9.7% on a jump in bad loans, including losses related to Enron Corp. The bank is eliminating jobs to cut costs.
Net income fell to $304.9 million, or $1.06 a share, from $337.5 million, or $1.15 a share, in the same period last year. The Atlanta-based bank reported a 79% rise, to $118.5 million, in loans that can't be collected.
The results for SunTrust, the first of the 10 largest U.S. banks to report first-quarter earnings, indicate rising bad loans are damping profits for banks and may hinder an economic rebound, analysts said.
The bank will eliminate jobs "sharply and quickly" and freeze hiring to control costs as the recovery from the recession lags expectations, Chief Executive L. Phillip Humann told analysts.