This Day On The Street
Continue to site
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

Investors Still Skeptical of Bank Stocks

NEW YORK ( TheStreet) - Financial stocks have gotten off to a strong start in 2012, but investors remain wary of the sector, according to a Citigroup report published Friday.

Following Citigroup's 2012 financial services conference this week, analysts at the bank noted attendance was "somewhat thinner than in recent years" and described investor sentiment as "broadly skeptical, cautiously optimistic at best."

That skepticism offers a counterpoint to a strong rally in financial stocks year to date. The Financial Select Sector SPDR (GS), a popular exchange traded fund that tracks financial stocks, is up roughly 14% so far in 2012 compared to a 6% rise in the Dow Jones Industrial Average.

Large cap banks have been among the biggest contributors to the XLF's rise. Bank of America (GS), for example, is up nearly 45% year to date. JPMorgan Chase (JPM) is up nearly 22% and Citigroup (C) is up more than 29%.

Still, Citigroup's analysts argued sentiment about the banking sector was "skeptical to neutral," with exchanges "mixed," asset managers "cautiously optimistic," and cards and specialty finance companies "positive.

Among the concerns highlighted for banks is the continued low interest rate environment. Bank of America CEO Brian Moynihan told investors at the conference he felt net interest income "had already mostly bottomed out and would be relatively stable," and that the bank "would focus on costs," according to the Citigroup report.

Bank of America chief Moynihan also stated that the $35 billion to $40 billion pre-tax earnings target unveiled by the bank in 2010 is still achievable, according to the report.

JPMorgan, Citigroup's only "buy" rated bank stock, did not present at the conference. Citigroup also has a "buy" on Capital One Financial (C) which it considers a credit card stock.

-- Written by Dan Freed in New York.

Follow me on Twitter
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $11.95 0.00%
XLF $20.49 0.00%
AAPL $93.99 0.00%
FB $102.01 0.00%
GOOG $682.40 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs