JP Morgan sees more large-cap banks facing earnings declines

(Reuters) - J.P. Morgan Securities said more large-cap U.S. banks are likely to face earnings declines that could pressure capital ratios and impact dividends at some other banks as credit quality continues to deteriorate.

Banks with high dividend payout ratios, such as Suntrust Banks Inc and U.S. Bancorp , are candidates for potential dividend cuts, analyst Vivek Juneja wrote in a note to clients.

Credit losses at Suntrust, which has 26 percent of its total loans in residential mortgages, are likely to continue to rise faster as weakness spreads to prime mortgages and losses increase in home equity and residential construction, Juneja said.

Midwestern banks, like Fifth Third Bancorp and National City Corp with more exposure to manufacturing companies in their overall commercial loan portfolios, are likely to face rising losses from weaknesses in real estate and manufacturing segments, he said.

(Reporting by Anurag Kotoky in Bangalore; Editing by Deepak Kannan)