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Tags: Bove | banks | legal | expense

Dick Bove: Govt Is Treating Banks Just Like Tobacco, Asbestos Industries

By    |   Wednesday, 14 January 2015 11:14 AM EST

Star bank analyst Dick Bove, vice president of equity research of Rafferty Capital, has been saying for quite some time that the government is going overboard in its legal fight against big banks, and he's not backing off now.

The government is treating the banks like tobacco and asbestos companies, he tells CNBC.

"Asbestos and cigarette companies have gone to court on a continuous basis for years. They won some lawsuits. They lost some lawsuits. But you could expect that their legal costs every year would be relatively high," Bove explains.

"That's what you're seeing in the banking industry, and we've been saying this now for five years. Their legal costs will stay relatively high. There are still thousands of lawsuits which have to be gone through for each one of these big banks."

He believes the legal expenses for banks will remain high "because all the rules have not yet been written for the industry,"

So what does this amount to?

"I think the industry has been nationalized effectively by the U.S. government, and the U.S. government is pressing hard on the profitability of the banks," Bove notes.

As for investing in bank stocks, he says it depends on what you think the economy will do this year. "If the economy does well, it will be almost impossible for banks not to do well. . . . I really believe that it will do really well in 2015"

JPMorgan Chase, the largest U.S. bank, reported Wednesday that its profit slid 6.6 percent in the fourth quarter, as fixed-income trading revenue plunged 23 percent and legal costs came in about twice as high as analysts expected, Bloomberg reports.

JPMorgan CEO Jamie Dimon isn't happy how the government is treating his bank through regulation and prosecutions. "Banks are under assault," he told reporters, according to The New York Times.

"You all should ask the question, 'How American that is? How fair that is?'"

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Finance
Star bank analyst Dick Bove, vice president of equity research of Rafferty Capital, has been saying for quite some time that the government is going overboard in its legal fight against big banks, and he's not backing off now.
Bove, banks, legal, expense
324
2015-14-14
Wednesday, 14 January 2015 11:14 AM
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