3 Bank Stocks for Basel 3

Analysts see the rules changes granting relief on residential mortgages.
By Dan Freed ,

NEW YORK (

TheStreet

) --

First Horizon National

(FHN) - Get Report

,

SunTrust Banks

(STI) - Get Report

and

BB&T

(BBT) - Get Report

are among U.S. banks best-positioned to benefit from Basel 3 rules governing bank capital, analysts argued Tuesday.

Citigroup analyst Keith Horowitz singled out those three banks in particular as standing to gain from changes in the way mortgages are evaluated in terms of risk under the international rules, which were approved and detailed by the U.S. Federal Reserve Tuesday.

The rules "move from an LTV

loan to value-based risk-weighting approach to an approach based mostly on lien positions. We see those banks with the largest mortgage portfolios, especially portfolios with higher LTV's at origination, benefiting the most," Horowitz writes, adding "those banks include FHN, STI and BBT."

Evercore Partners analysts also included First Horizon and SunTrust in a list of 10 banks they expect to benefit from what they called "risk weight relief" on residential mortgages.

Bank of America

(BAC) - Get Report

and

Regions Financial

(RF) - Get Report

were also on that list. Evercore analysts did not single out BB&T as benefiting from the Basel 3 rules, however in the same note they listed it as one of five top sector picks, along with Bank of America,

JPMorgan Chase

(JPM) - Get Report

,

State Street Corp.

(STT) - Get Report

and

Zions Bancorporation

(ZION) - Get Report

.

--

Written by Dan Freed in New York

.

Follow @dan_freed

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

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