×

US banks are the LeBron James of the stock market, says Mike Mayo

One top-rated analyst says the banks still have plenty of upside left, even as markets post record highs.

November was the best month in history for the banks as the SPDR S&P Bank ETF gained 18.69 percent, outperforming the broader S&P 500, which gained 3.42 percent.

"I'd say that the U.S. banking industry is in a way like the LeBron James of the stock market. They have incredible defense, the most resilient balance sheets in a generation, but now with this pro-growth agenda, they might also have a little bit of offense, too," Mike Mayo, managing director at CLSA, said on CNBC's "Fast Money."

But Mayo argued there's even more support for his bullishness on the sector than a pro-growth economic agenda. Steve Mnuchin, Trump's Treasury secretary pick, told CNBC earlier Wednesday that cutting the corporate tax rate from 35 percent to 15 percent is a major goal for the incoming administration.

Mayo argued that the sector will gain amid potentially lower corporate tax rates and higher interest rates, as long as there isn't an increase in regulatory burdens.

While some may argue that regulations have hindered the sector, Mayo explained that regulations have helped reinforce the foundation of the banks in the wake of the Great Recession. Current levels of regulations are appropriate and "now it's time to let banks facilitate growth," he said.

"You don't need to roll back Dodd-Frank to make the bank stocks work," Mayo said.

Correction: This story has been revised to reflect that the corporate tax rate is 35 percent. An earlier version misstated that figure.