Nomura Securities on U.S. Banks: Notes from the Road; Regionals vs. Big Banks

Nomura Securities on U.S. Banks: Notes from the Road; Regionals vs. Big Banks

Analyst, Brian Foran, said, "Over the past month, regionals have outperformed big banks and brokers by 15% (down 7% vs. down 22%). Regionals now trade at a relative multiple of 1.9x to big banks and brokers, the highest relative valuation since the less developed credit crisis in the late 1980s. There is a disconnect from the yield curve as the 10-year is hitting new lows, and most investors shrug it off for regionals. Additionally, mortgage origination is having a record year with a benefit from HARP loans given the big secondary market pay-ups. SunTrust (NYSE: STI) is the stock we find ourselves pitching the most."

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