Top Bank Stocks for 2012: Credit Suisse

NEW YORK ( TheStreet) -- Citigroup ( C) and JPMorgan Chase ( JPM) are the top bank stock picks for Credit Suisse large cap bank analyst Moshe Orenbuch for 2012.

Orenbuch sees the upcoming release of the Federal Reserve's "stress test," results as "a positive catalyst for the bank group."

Orenbuch argues JPMorgan "has the flexibility for both an increased dividend and share repurchase" as the company approaches Basel 3 capital targets."

He also sees it as likely that Citigroup will be able to begin returning capital to shareholders, which, even though "somewhat more modest" than JPMorgan's should give the shares a lift.

"It will highlight the company's strengthened balance sheet and capital generation, despite a discounted valuation," Orenbuch writes of Citigroup.

Orenbuch also expressed bullishness on U.S. Bancorp ( USB), grouping it with Citigroup and JPMorgan as among "the banks positioned to be most successful in terms of bottom line earnings growth" because they can "grow loans, effectively manage expenses and deploy capital." Orenbuch has an "outperform" rating on all three banks.

Orenbuch also has an outperform on Bank of America ( BAC) despite the fact that he dropped his price target to $11 from $13

"While near-term revenue headwinds continue Bank of America has significant opportunities to accelerate revenue growth in 2012 by re-pricing. In addition, we see opportunities to improve capital and book value through optimizing the balance sheet. Streamlining of businesses could lead to further strategic dispositions and asset run-off," Orenbuch writes.

>>To see these stocks in action, visit the Top Bank Stocks for 2012 From Credit Suisse portfolio on Stockpickr.

-- Written by Dan Freed in New York. Follow this writer on Twitter.

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

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