This year should be a “good year” for banks, said Jeffrey Harte of Sandler O’Neill.
“Once the Fed’s stress tests get done, there’s plenty of room for JPMorgan to raise that 5 cent dividend to at least 15 cents in the first quarter and maybe start looking at 25 cents in 2012,” Harte told CNBC.
“Banks that have a strong enough balance sheet to start returning capital—and JPMorgan’s certainly one of them—that’s a positive catalyst that we’ll see in 2011.”
Earnings seasonkicked off this week and financials will be in focus when JPMorgan reports before the bell on Friday. Harte said his top picks include Citigroup and Bank of America .
“Longer-term, I like [Citigroup] the best because of some of the international consumer [exposure],” he said. “Looking at 2011, though, I like BofA primarily on perception play.”
“The market is overly negative on how big their put-back losses will be and how big the revenue fee impact from regulation will be,” he explained. “I think we’re going to get more clarity in 2011 and it will be positive as opposed to negative clarity.”
Scorecard—What He Said:
- Harte's Previous Appearance on CNBC (Jan. 3, 2011)
More Market Views:
- US Markets—The 'Place to Be' This Year: Stock Pickers
- Forget Citigroup—Rotate Into These Banks Instead: Pro
- Mortgage-Backed Securities to Save Financials?
CNBC Data Pages:
Other Major Financials:
Harte has investment banking clients who own shares of BAC, BK, C, JEF, JPM and NTRS.
Sandler O’Neill has received compensation from the above companies for providing products or services other than investment banking services in the past 12 months.