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If There's a 'War' Against Banks, the Banks Are Winning

Paul Hilton | Bloomberg | Getty Images

Five years after large U.S. financial institutions threatened to capsize the global economy, a seemingly endless parade of negative headlines continues to bedevil the banking industry.

But even though some of the headlines may not look good, the scorecard shows banks are winning what one analyst has called a "war" against them.

Like the rest of the market, bank stocks bottomed in March 2009 but have rebounded ever since.

(Read More: How Tiny Cyprus Could Still Have Big Market Impact)

They've even done better than the major averages, which have been on a powerful run in 2012 and 2013, and analysts are getting more vocal in their crowing over the industry's health.

"Despite these results, or perhaps because of them, the government is now making a new attempt to cripple the banks," Dick Bove, the outspoken vice president of equity research at Rafferty Capital Markets, said in a note to clients. "Fortunately, it is likely that no one is going to listen to the attackers at this point."

The KBW Bank Index surged nearly 30 percent last year - more than twice the Standard & Poor's 500 - and is up another 10.5 percent in 2013, ahead of the S&P's 8.8 percent rise, though they've hit some resistance this week in the face of another European debt headache.

Bove alleges that a media-government cabal "oriented toward one goal: Get the banks," has formed but failed to take down the financial industry's major players.

Most recently JPMorgan has been in the government's sights over the London Whale trading debacle that cost the country's largest bank more than $6 billion in losses and generated a public relations disaster.

(Read More: Former JPMorgan Exec Blames Others for 'Whale' Loss)

Bove said the anti-bank crowd should focus on more compelling facts about the industry: Earnings have grown 14 straight quarters and profits rose 20 percent to $141 billion, the second-best ever, in 2012, with more likely to come this year.

While Bove has been bullish on banks for several years now, he's getting more company.

Meredith Whitney appeared Monday on CNBC's "Closing Bell" and offering a fairly stunning reversal of her market and bank stock views.

Her comments came as the market was having a hard time digesting the weekend headlines out of Cyprus, where bank depositors face a 10 percent tax in an effort to bail out the nation's financial system.

U.S. banks have taken a hit the past two days as investors recoil against possible systemic damage from Cyprus.

But Whitney said this shows why U.S. banks are a buy.

"It just further strengthens, then, the U.S. as a desirable safe and sound place to put money," said Whitney, founder of the Meredith Whitney Advisory Group. "You have to be bullish on U.S. equities here. You have so much offshore money coming into the U.S. looking for someplace safe and sound."

(Read More: 'You Have to Be Bullish,' on US Stocks: Whitney)

Specifically, she mentioned Discover Financial and Bank of America, once among her favorite financial whipping boys, as major value for investors.

"What's amazing about this is very rarely do big banks have value, catalysts and momentum, and Bank of America has all of that," Whitney said. "The stress test was a huge catalyst for this name. It's been the stealth operator, the stealth deliverer."

Indeed, by Bove's calculations an investor who started a fund and put $10,000 a week into BofA every week since the crisis began with the implosion of Bear Stearns in March 2008 would have a $2.6 million investment with a $360,412 profit.

Of course, this type of enthusiasm for a sector or market outlook often comes at the top of markets, and the headwinds the industry faces are substantial.

Congress is likely to push forward with more regulations, with the Volcker Rule - aimed at banning banks from trading for their own profit - likely to crop up again this year.

But FBR Capital Markets, in a recent analysis, said the JPMorgan kerfuffle probably would have "downside risk" that would be "minimal' as regulators look to strike a balance.

Also, the recent Bank of America fund managers survey showed the most bullish attitude toward banks since December 2006.

"The U.S. banking system is on much stronger footing than it's been in a long time - record capital, record liquidity, improving credit quality and increasing earnings," Jason Goldberg, senior equity analyst at Barclays, said in a CNBC appearance Tuesday.

Banks, he said, "outperformed last year, (are) outperforming year to date...We think the group can continue to work higher."

-By CNBC.com's Jeff Cox. Follow him on Twitter @JeffCoxCNBCcom.

Wall Street