Zions falls after saying income may not cover dividends, interest

(Salt Lake Tribune) Shares of Zions Bancorp, the Utah-based lender that operates in 10 Western states, fell 8 percent Tuesday after the bank said its income probably will not cover interest and dividend payments for 2009, and will have to dip into cash reserves to do so.

Zions fell the most of any company in the KBW Bank Index on a day financial stocks were lower on pessimistic outlooks for financial institutions from some analysts. Zions helped lead a 4.4 percent drop in the 24-member KBW index, though it has substantially outperformed the index in recent months.

Zions spokesman James Abbott said the company has plenty of cash on hand, $675 million, to meet its annual debt obligations of about $200 million, which include interest on its debt and dividends for preferred shares.

Original Article