Why 2016 will be a record for bank mergers: Bove

Mergers between U.S. banks could hit the highest level in a decade this year, Rafferty Capital's Richard Bove told CNBC on Thursday.

The veteran bank analyst said the Federal Reserve opened the door to mergers and acquisition activity last year when it allowed BB&T Corporation to purchase both Susquehanna and Bank of Kentucky. The bank is also set to purchase National Penn Bancshares in 2016 for approximately $1.8 billion.


BB&T
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"In the United States, I think you will see a huge wave of mergers in banking in 2016," Bove, who is the vice-president of equity research at Rafferty Capital, told CNBC.

"The regional banks are going to be buying each other and I would expect to see 2016 being one of the biggest years for bank mergers that we have seen in the last decade," he later added.

Bove spoke to CNBC as U.S. earnings season kicked off. On Thursday, Dow-listed JPMorgan Chase posted earnings per share of $1.32 for the fourth quarter on revenue of $23.7 billion.

On Friday, there will be earnings from BlackRock, Citigroup, US Bancorp and Wells Fargo.

Bove forecast 2016 would be "relatively good" for Wall Street's biggest banks.

"Unless one wants to project a significant recession in 2016, these big banks, that looked so bad in the fourth quarter, are going to look pretty good in the first quarter," he told CNBC.