Banks Must Raise Capital for Another Year: Strategist

We’re seeing the financial industry slowly recover, said James Rohr, chairman and CEO of PNC Financial Services Group and Jimmy Dunne, senior managing principal at Sandler O’Neill. They shared their sector outlooks.

“If we don’t have a strong banking system, we have nothing in [the U.S.] because we won’t have a chance of growth,” Rohr told CNBC.

“The industry is doing quite well—recovering from some major mistakes that were made.”

Rohr said that in hindsight, the Troubled Asset Relief Program (TARP) was “one of the greatest stabilization ideas” for the banking industry.

“Remember, it [TARP funds] only went to good banks—it was an investment from the government to stabilize the good banks,” he said.

“If you look at the markets since they did that, it stabilized the markets from the cliff and the markets and liquidity have come back consistently since then.”

Going Forward:

Meanwhile, Dunne said a number of banks would have to continue to raise their capital for at least another year.

“And then we’ll see a more normal environment where the M&A will come back and you’ll see fewer banks over the next few years,” said Dunne. “You’ll see [banks] go from 8,000 to 3,500 over the next few years.”

“The players that will have done well are those that did something in ‘08 and ‘09 and made the right choices.”

Scorecard—What They Said:

  • Dunne's Previous Appearance on CNBC (Jun. 9, 2009)
  • Rohr's Previous Appearance on CNBC (Nov. 17, 2009)

Strategists on Financials:

CNBC Data Pages:

CNBC Slideshows:


Top Financials:

Goldman Sachs

Morgan Stanley

JPMorgan Chase

Bank of America



No immediate information was available for Dunne or Rohr.