KeyCorp, Capital One to receive cash infusion

Business Materials 26 October 2008 14:00 (UTC +04:00)

KeyCorp, Zions Bancorp and Capital One Financial Corp are some of the banks that will receive cash under the U.S. government's second round of capital infusions, a source familiar with the Treasury Department's thinking said on Sunday.

Four banks, including PNC Financial Services Group Inc, have already announced they are participating in the second round of capital injections, Reuters reports.

Under the government's $700 billion financial services rescue package, the Treasury Department will inject $250 billion of capital directly into banks in exchange for preferred shares and warrants.

Treasury is providing funds in a bid to revive the financial sector, which has suffered since lending dried up and many of the loans banks made have gone bad.

Treasury has already allotted $125 billion to nine of the nation's largest banks including Goldman Sachs.

About 20 regional U.S. banks are expected to receive cash under the Treasury Department's second round of the bank recapitalization program.

It was not clear how much KeyCorp, Zions and Capital One will receive. The banks are expected to make the announcement as early as Monday.