×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Skip to main content
Tags: UBS | Regional | Banks | negative

UBS: Time to Withdraw from Regional Banks

By    |   Friday, 23 April 2010 08:59 AM EDT

Analysts at UBS, Switzerland’s largest bank, have turned negative on U.S. regional banks.

The reason: a sluggish recovery in the credit sector, commercial and residential real estate and a sluggish drawdown in the banks’ reserves, UBS analysts say.

They recommend that investors sell a large number of regionals, including KeyCorp, Huntington Bancshares, Regions Financial and TCF Financial.

"We continue to believe the pace of earnings recovery will fall well short of expectations,” the analysts told CNBC.

“We think the recent rally and ensuing valuations are unsustainable, and the group is poised for a meaningful pullback."

CNBC’s Bob Pisani says what is most important for banks this quarter is credit. “We need to see the rate of loan charge offs and delinquencies leveling off and begin decreasing,” he wrote on CNBC.com.

“Provisions for future losses need to start declining. Unfortunately, it is likely that charge offs for things like credit cards will remain high this quarter, as will mortgage writedowns.”

Still, he sees a bright spot: bond trading revenues.

“It was a great quarter, with oceans of money continuing in areas like high yield.”

While UBS is bearish on regional banks, MIT economist Simon Johnson is concerned about the country’s biggest banks.

"The process of saving them has allowed them to build themselves up so that their balance sheets are now bigger than they were before the crisis. The too big to fail problem has become worse," he told Reuters.

© 2024 Newsmax Finance. All rights reserved.


StreetTalk
Analysts at UBS, Switzerland s largest bank, have turned negative on U.S. regional banks. The reason: a sluggish recovery in the credit sector, commercial and residential real estate and a sluggish drawdown in the banks reserves, UBS analysts say. They recommend that...
UBS,Regional,Banks,negative,
239
2010-59-23
Friday, 23 April 2010 08:59 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
TOP

Interest-Based Advertising | Do not sell or share my personal information

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved
Download the NewsmaxTV App
Get the NewsmaxTV App for iOS Get the NewsmaxTV App for Android Scan QR code to get the NewsmaxTV App
NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved