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Analyst Sees Bank Malaise

Prudential's Mike Mayo bashes the bank sector.
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The banking sector got a downgrade Friday from an influential analyst after a week of lackluster earnings.

Prudential Equity analyst Michael Mayo slapped an unfavorable rating on the banking sector in light of a "revenue malaise" that has limited earnings growth at many lenders. He previously had a neutral rating on the sector.

The Prudential analyst, in a research note, says banks on average posted a 6% gain in third-quarter profits, with about half of the large banks falling short of the mark. Mayo said the quarter was marked by evidence of "decelerating momentum," with banks facing a combination of interest rate pressures and "dampening consumer loan growth."

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