SunTrust Hires Pricewaterhouse,
Ends 60-Year Link With Andersen

ATLANTA -- SunTrust Banks Inc., ending a 60-year relationship with accounting firm Arthur Andersen LLP, said it hired PricewaterhouseCoopers LLC to audit the bank's books.

Smaller companies have parted ways with Andersen in the wake of the scandal at Enron Corp. But the loss of SunTrust, one of the Southeast's largest banking companies, is a bigger blow to the accounting firm, as the move could make it easier for others to follow. Another longtime Andersen client, Delta Air Lines, is evaluating whether to replace Andersen as its independent auditor.

SunTrust said its decision wasn't related to Andersen's ties to the financial scandal at Enron. Instead, the Atlanta bank said it had been evaluating a change in accounting firms since last April. A SunTrust spokesman, Gary Peacock, said the review was similar to a review of other vendors, such as long-distance telecommunications providers.

"This is not an issue of firing Andersen," Mr. Peacock said. Mr. Peacock said that Pricewaterhouse presented to the bank's board the most impressive offer at the best price.

However, individuals close to SunTrust said the bank's board, ever mindful of SunTrust's conservative image, had taken into account Andersen's problems in auditing Enron. An Andersen spokesman, Charles Leonard, said Andersen regrets losing any client. Andersen is grateful that many other clients continue to use its services, he added.

SunTrust paid Andersen $1.7 million last year for auditing work and $1.4 million more for consulting and other work.

Other large companies are expected to announce decisions in the next few weeks on whether they plan to stick with Andersen. BB&T Corp., a Winston-Salem, N.C., banking company, is expected to make a decision next month. Delta also expects to announce its decision in March.

It is too early to tell whether Andersen is facing an unusual number of defections. But as companies close their books for 2001, the trend should become more clear, said Richard Ossoff, publisher of Atlanta-based Strafford Publications Inc. and Auditor-Trak, which follow the accounting industry.

SunTrust announced the change of auditors along with a move to boost its quarterly cash dividend by 7.5%. The bank said the new cash dividend of 43 cents a common share is payable March 15 to holders of record Feb. 28.

Write to Carrick Mollenkamp at carrick.mollenkamp@wsj.com²

Updated February 13, 2002 12:01 a.m. EST