Banking stocks in the S&P 500 are down 12.3 percent year to data as investors worry over loan losses in the ailing energy sector and persistently low interest rates.
The declines banks have suffered represent a typical downdraft investors see heading into a change in the business cycle and a more difficult credit environment, he said. UBS is indeed expecting tighter credit, but Hawken noted that bank stocks are still trading at a discount to valuation.
"To me, we've priced in a great deal of bad news. Fundamentally, when you look through the loan books, it looks like if we see deterioration, it's really not going to be that bad. It ought to be manageable," he told CNBC's "Squawk on the Street."
"I want to buy them at this level," he added. "We're starting to see them base out."
The big questions institutional investors have are whether enough bad news has washed out and whether the market understands the extent of the pain.
There is not clear answer yet, he said, but UBS became more constructive on banking stocks about a month ago, shortly before JPMorgan Chase CEO Jamie Dimon bought millions of dollars worth of his company's stock.