Nomura Securities on Universal Banks: BofA (BAC) Vs. Citi (C)

Nomura Securities on Universal Banks by Glenn Schorr

Schorr said, "A valuation comparison between BofA (NYSE: BAC) and Citi (NYSE: C), where C has the edge, in our view. Citi’s and BAC’s stocks are down ~36% and 43%, respectively, since the beginning of July (versus down ~13% for the S&P 500) and are now trading on a similar price to tangible book (C - 55%, BAC - 50%). We think the sell-off in both stocks may be overdone, particularly for Citi because, relative to BAC, the firm’s risk profile is materially different (less mortgage-related tail risk, higher capital/reserves, less legal/regulatory pressures), and Citi has greater exposure to the higher-growth markets in Asia and Latin America. We think Citi is the more attractive opportunity compared to BAC."

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