NEW YORK (
) -- As the end of 2010 nears, financial stocks this week got a boost from the government's further decoupling from
and regional banks. This week also saw the beginnings of consolidation in the bank sector, despite further clarification on debit interchange fees.
Financial Select SPDR
is up more than 7% this month, even after losing approximately 2% over the previous week.
shares got trounced late in the week after the
published two competing proposals for setting
Investors got spooked because the proposed fee cuts are higher than expected, even though the payments networks have little direct exposure to interchange fees. In addition, analysts said there was little clarity in the proposals regarding the network exclusivity arrangements that legislators are seeking to limit.
Still, analysts, for the most part, say the stocks should be bought, given strong long-term growth trends in the payments industry.
It looks as though the much-talked about
wave is starting.
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agreed to be acquired by the
Bank of Montreal
for $4.1 billion in an all-stock deal. The deal price represents a 35% premium to M&I's closing stock price on Thursday, but it is still technically a take-under because it is only 0.98 times the company's tangible book value, one analyst said.
The news of the acquisition pushed up shares of other regional banks that could be takeover targets, including
Earlier in the week shares of
surged on speculation that
PNC Financial Services
had been sniffing around banks in Florida.
BankAtlantic's CEO said that the company, despite wanting to remain independent, was "open to opportunities."
The news of bank consolidation coincides with more banks looking to repurchase preferred stock owned by the U.S. Treasury Department under the Troubled Asset Relief Program. This week
announced capital raises that are efforts to repay TARP.
Bank of America
once again found itself in the news this week. The Charlotte-based bank is reportedly in settlement discussion talks with several investors over mortgage putbacks.
At the same time,
, sort of like an annoying bug bite that won't go away, reasserted Friday that it does indeed plan to release damaging information about at least one major bank, which some have thought to be BofA.
And as a reminder, just because it's a holiday next week doesn't mean the news stops.
The Street's Weekly Financial Recap
will be published as usual next Saturday.
-- Written by Laurie Kulikowski in New York.
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