Financials led the markets higher on Monday, after the Basel Committee on Banking Supervision ("Basel III") announced its new regulations. Should investors buy the banks now? Chris Kotowski, analyst at Oppeneimer, and Collyn Gilbert, managing director and senior bank analyst at Stifel Nicolaus shared their best plays.
“You buy into banks because fundamentals are improving,” Kotowski told CNBC. (Scroll down to see his full stock picks.)
“The thing to focus on is that month-in and month-out, credit quality is getting better since the fourth quarter of last year...and after that, you’re going to get loan-growth at some point in the future,” he said.
Kotowski described the Basel III regulationas a “complete sideshow,” because banks already have plenty of capital to meet requirements.
In the meantime, Gilbert said consolidation continues to be the theme that drives the banking industry.
“A lot of banks are struggling from the administrative cost, and topline perspective seems weak, so we have a slew of banks…that can be targets,” she explained. “You can make money buying these banks that are trading below book value.”
Bank of America
NY Community Bancorp
Scorecard—What They Said:
- Gilbert's Previous Appearance on CNBC (Aug. 13, 2010)
- Kotowski's Previous Appearance on CNBC (Jul. 14, 2010)
Basel III—3 Viewpoints:
- Basel III 'Irrelevant,' Won't Stop Next Crash: Analyst
- After Basel, Financials Will Still Struggle: Charts
CNBC Data Pages:
No immediate information was available for Gilbert or Kotowski.