Wal-Mart hikes bank funds plan

Wal-Mart Stores Inc., the world's largest retailer, increased the funding for its industrial bank more than 10-fold to $125 million to allay concerns by regulators.

The company agreed to raise the capitalization from $12 million in a March 1 letter to the Federal Deposit Insurance Corp. that was posted on the agency's Web site. The FDIC must approve Wal-Mart's application for deposit insurance for the bank, which would be based in Salt Lake City.

Wal-Mart also said it will hire a chief risk officer and that it plans to offer products including debit and credit cards. Wal-Mart is modifying its plans for a bank amid opposition from community groups and small banks, which are concerned the retailer will dominate lending and open branches. Wal-Mart says it has no plans to make loans or set up branches.

Michael Jones, chief examiner for Utah's banking department, said state officials asked Wal-Mart to examine its bank funding on concern the retailer hadn't provided enough capitalization to cover its operations.

FDIC spokesman David Barr said Wednesday the sum Wal-Mart set aside is "a large amount of capital." Barr said the agency often requires new banks to have more capital "as a little added cushion because they don't have any experience with the business plan."

Shares of Wal-Mart, based in Bentonville, Ark., rose 30 cents to close at $48.05 Wednesday on the New York Stock Exchange.

Wal-Mart earlier dropped its request for an exemption from federal requirements for investing in low-income neighborhoods.