The outspoken bank analyst expects Fannie Mae and Freddie Mac to survive in some form.
Even the weakest performers among large-cap U.S. bank stocks have seen stellar returns this year.
Bank stocks were sluggish on Tuesday amid a wave of mixed economic reports.
The Federal Deposit Insurance Corp. reports that U.S. banks saw their third-quarter earnings drop 3.9% from a year earlier.
These four large-cap banks have led the sector this year.
Citi's shares have 18% upside over the next 12 to 18 months, according to Oppenheimer analyst Chris Kotowski.
Bank stocks continued their epic run on Monday, following two reports showing a slowing of the U.S. housing rebound.
Stocks of the "big four" U.S. banks continue to trade well below their customary levels to book value.
A possible policy change by the Federal Reserve could force banks to push some depositors away.
Most bank stocks headed higher on Friday, as the Dow Jones Industrial Average continued its push into record territory.