This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Forces That Could Fire Up Bank Stocks in 2012

Stocks in this article: BAC C JPM USB BBT SNV RF

However analysts argue that consolidation in the sector is inevitable. "Negative operating leverage from record low interest rates and weak loan demand, should accelerate industry consolidation, in our view, as more banks realize they cannot deliver competitive returns on capital in this operating environment," Baird Equity Research analysts said in a report.

Baird expects US Bancorp (USB) and BB&T (BBT) to capitalize on attractive opportunities while weaker regionals such as Synovus (SNV) and Regions Financial (RF) are most likely acquisition targets.

1. Presidential elections: The Presidential elections could be a game changer for the financial services industry, although its impact will only likely be realized in 2013.

Analysts believe that the anti-Wall Street rhetoric in Capitol Hill would subside if Republicans take more control. "Historically banks have done relatively well in election years, regardless of the outcome," Barclays Capital noted in a report. Bank stocks have risen by an average 10% in the Presidential election years since 1937, double the S&P 500 average of 5%, the analysts noted. "Bank stocks rose in 10 out of the past 12 election years, outperforming in 8 of those. Furthermore, in each of the 4 years in which a Republican president unseated a Democratic one (1952, 1968, 1980, 2000) bank stocks finished higher (outperforming in 3 of those), rising an average of 19%, compared to the S&P 500's average 9% rise."

RBC Capital analyst Gerard Cassidy is more explicit. "Should President Obama not be re-elected, the banking sector, one of the most vilified industries in Washington, D.C., would likely see its stock prices positively impacted by his loss."

--Written by Shanthi Bharatwaj in New York



>To contact the writer of this article, click here: Shanthi Bharatwaj.

Readers Also Like:


Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
3 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs