) -- Bank investors may face a rough slog ahead to get back to a sustained stock rally for the industry.


(C) - Get Report

engineered a $17 billion capital raise this week, offering a record-setting 5.4 billion shares. That followed

Bank of America's

(BAC) - Get Report

sale of 1.3 billion shares for $19.3 billion.

Wells Fargo

(WFC) - Get Report

soon followed up with a sale of 490 million shares to raise $12.25 billion. And after all that, the Treasury Department will be selling its 7.7 billion Citi shares over the next year.

If investors haven't gotten enough bank stock, there are still 641 banks participating in the TARP program, including some large firms like

PNC Financial

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Discover Financial Services

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, and regional names like

Huntington Bancshares

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(ZION) - Get Report



(KEY) - Get Report


M&T Bank

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TheStreet Recommends

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. More than a few of them will likely try to exit the program next year, requiring further capital raises, while investors are still digesting the mammoth year-end offerings and the Treasury's Citi exit.

It'll take a lot of demand to soak up such a huge supply of new stock for an industry that has already raised hundreds of billions of dollars in capital over the past couple of years to cover escalating loan losses. Investors will need to see the peak in credit costs that so many bank executives have predicted, and a return to strong profits.

But it's not clear that will happen soon, with unemployment remaining doggedly high and

commercial loan losses afoot

. Consumer-oriented banks may face hard times for a few more quarters than others like

JPMorgan Chase

(JPM) - Get Report


Goldman Sachs

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, which can lean on the capital markets for growth.

Furthermore, new consumer-protection laws promise to eat away at margins by cutting fees and disallowing banks from lifting interest rates unexpectedly. At the same time, while consumer debt levels remain high, bank customers have shifted from spending beyond their means to paying down those debts and saving whatever remains.

What all of this means is that while opportunities will abound as the Great Recovery takes shape, banks are also being forced to make sweeping changes to the way they do business. They will have to not just force products down their customers' throats with mass mailings and free toasters, but customize offerings so that each person has the services and products that suit her best.

Wells Fargo has been a champion of this tactic, which the industry refers to as cross-selling. Wells has leveraged


(WB) - Get Report

footprint and retail brokerage and investment banking products to use on its wide array of customers, such as municipalities that need to offer debt. It has leveraged its own strength in mortgage banking to assist struggling homeowners in Wachovia's portfolio of debt, and to earn big profits from the refinancing wave that took place earlier this year.

Bank of America's new CEO Brian Moynihan has indicated that his firm plans to take the same tack. The bank indicated that it will see hundreds of millions of dollars worth of fee revenue vanish because of new consumer laws. But it's also expanding and improving its ATM network, leveraging the strength of

Merrill Lynch's

investment banking capabilities and


huge network of mortgage banking.

Now it's figuring out the best way to market new products to existing customers across its gigantic footprint, which touches one out of every two households in America.

"We build a product around your usage pattern, not around ours," Moynihan told the

New York Times

in an interview last week. "Customer-centric is you sell a checking account, you sell a savings account. You set up a credit card. Customer-centric is, how do you integrate that card product into what people want?"

There's little doubt that banks will find a way to earn money from their customers, but the transition will take some time. Investors who are buying stock in the near-term may have to be patient for the tremendous growth required to warrant all their offerings.


Written by Lauren Tara LaCapra in New York