Analyst Bove Cuts Fifth Third, SunTrust to Sell - Economy * Europe * News * Story

MORE HEADLINES

Markets | Economy | Companies

- Health Care Bill Clears First Senate Hurdle

FEATURED SLIDESHOWS

Runway Angels
The superbowl of fashion shows, models walk down the runway at the 2009 Victoria's Secret Fashion Show.
The Richest Members of the US Congress
Recently, the Center for Responsive Politics found that there are 237 millionaires in the US Congress.
10 Tips to Get Out of Debt
Renowned financial author Gail Vaz-Oxlade takes a tough-love approach to helping couples in a financial crisis to face reality.

FEATURED QUIZZES

How Much Do You Know About Green?
Green has become part of our everyday lives. Green is everywhere-- energy, clothing, food, housing, transportation. It's a big business and a global business.
The Billionaire BFF's
Philanthropists. Bridge partners. Hockey players. Which responses are based on facts from Buffett's and Gates' real lives?
The Many Myths of Coca-Cola
Can you tell which statements are true, and which ones are just rumors?

SPECIAL REPORTS

Winterizing Your Portfolio
If 2009 was the winter of our discontent, will 2010 be a winter wonderland for investors? A lot depends on the recovery—or lack thereof.
Investor's Guide to Real Estate
Some even say the long-awaited recovery is here. Regardless, buyers and sellers alike can profit from our guide.
Alternative Investing
Stocks and bonds? Sure. But it's a big world out there for investors.

CNBC ON DIGG

Analyst Bove Cuts Fifth Third, SunTrust to Sell

Published: Monday, 26 Oct 2009 | 7:06 AM ET

Text Size

By: Reuters

Many U.S. regional banks, including Fifth Third Bancorp and SunTrust Banks Inc, may not show a profit until 2011, veteran banking analyst Richard Bove said, and downgraded both the stocks to "sell" from "neutral."

"I think that 2010 is going to be a tough year for the (banking) industry and that these stocks do not have built in to their prices this potential or the likelihood that Congress will pass punitive legislation," the Rochdale Securities' analyst wrote in a note to clients.

U.S. Bancorp [USB Loading... () ] appears to be particularly vulnerable if U.S. lawmakers pass a financial reform package that will definitely harm the industry's profits, Bove said and downgraded the Minneapolis-based bank to "neutral" from "buy."

Congress is wrestling with regulatory reforms aimed at avoiding a repeat of the crisis that helped push the U.S. economy into its deepest recession since the 1930s.

U.S. President Barack Obama has pushed lawmakers to wrap up their efforts by year-end, but the process is likely to drag into next year as Congress wrangles over details.

Analyst Bove has repeatedly emphasised that government moves to raise capital requirements for banks and restrict use of derivatives, among others, are aimed at reducing the profit making capability of banks.