Amidst investor uncertainty about Treasury Secretary Timothy Geithner’s latest plansto rid banks of toxic assets, Dirk Becker of Kepler Capital Markets remains optimistic. He told CNBC that the plan may even make investment bank stocks a worthy investment.
“[Geithner’s plan] is definitely good news for the sector because it means that some liquidity is coming back,” said Becker. “When you look at some of the assets that are on the banks’ books, there’s definitely a lot of value in some of these assets and these values can now be crystallized.”
Becker says that while financial profits may never be as high as in the past, he's still betting on investment banks.
“We will see deep recession, loan losses for the banks, more regulation and higher equity requirements,” he said. “So for many banks—particularly those who are strong in lending—they’ve got lots of problems in front of them. [However, Geithner’s plan has helped] investment banks, which are now getting out of the mess. It’s the investment banks where we’re turning a little more positive on, not the corporate lending banks.”
Disclosure information for Dirk Becker was not immediately available.
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