"Capital market revenue is 25 percent lower than where its been," Rendino said.
Few have been able to take the hit in stride like JP Morgan, and Citigroup , Rendino said.
"Citi will be able to return capital to shareholders after a long period of deleveraging. We expect the dividend to be about 40 cents. They have delevered, and have high capital ratios."
But Rendino said BlackRock is more cautious on Morgan Stanley , "given real weakness in capital markets."
Rendino said he's watching cost cutting closely. Quite simply, expenses can't grow faster than revenue, he said, adding, "Every 1 percent reduction in expenses leads to about a 1 percent to 4 percent increase or decrease in earnings."
In a separate interview, Fred Cannon, equity strategist at Keefe, Bruyette & Woods, said the drag on revenue is due to tighter federal regulations. " The Volcker ruleis coming right at us, especially in the capital markets business."
Though earnings winners and losers will soon be known, another analyst thinks banks' capital markets losses have already been priced into the markets.
"What matters is how good are these guys able to manage their costs," Jeffery Harte, principal at Sandler O'Neill, said in the same interview with Cannon.
Harte thinks these banks will tighten their belts by cutting compensation.
"Wall Street is a less lucrative place to work," said Harte.
Additional News: Treasury Calls Out JPMorgan For Mortgage Servicing Practices
Additional Views: Analysts Lowering Bank's Fourth-Quarter Earnings Estimates
CNBC Data Pages:
BlackRock's basic value equity fund includes shares of JPM and Citigroup. Kevin Rendino does not personally own these stocks. Sandler O'Neill has received compensation from MS for providing products or services other than investment banking. Jeffery Harte does not own stock in MS. Keefe, Bruyette & Woods expects to receive or intends to seek compensation for investment banking services from JPM in the next three months. Fred Cannon does not personally own stock in the aforementioned banks.