A smart move to own bank stocks: Analyst

Now is a smart time to own banks, said CLSA's bank analyst, Mike Mayo, on Wednesday.

"As simple as ABC, and the A is for asset quality, which remains very strong," said Mayo. "The B is for balance sheets, which is stronger than they've been in a couple decades, and the C is for consistency. Banks are to have much more consistency in their earnings results."

Mayo also added the letter V for volatility as there will be some ahead with Greece, regulations, earnings and capital markets.

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Mike Mayo, managing director at CLSA
Scott Mlyn | CNBC
Mike Mayo, managing director at CLSA

The increase of rates by the Federal Reserve or the decision not to both have chances to impact bank stocks as well, said Mayo.

"If the Fed raises rates and the yield curve flattens, that can flatten bank earnings prospects," said Mayo. "Also, if the Fed does not increase interest rates and we're lower for longer with rates, that could also hurt bank stock performance.

"For that reason, we recommend owning bank stocks that can work even if interest rates don't go higher, even if the yield curve doesn't steepen. We like having banks that have an extra earnings lever to pull if the environment stays sluggish the way it's been. That's why Citigroup is perhaps the best global restructuring story among banks."