Tags: Dick Bove Obama Waging War on Banks

Dick Bove: Obama Waging 'War on Banks'

Wednesday, 15 February 2012 07:59 AM

President Barack Obama's plan to impose a new $61 billion tax on banks is just another piece of evidence of Washington's war on banks, says Rochdale Securities banking analyst Dick Bove.

"There's no question that there is a war on banks and I think that you're going to see headline risks for this group for a least the next 12 months, until the election is over," Bove told CNBC.

According to Bove, Washington perceives bankers and banks as "evil," making the risks in these stocks "very real."

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The new bank tax is part of Obama’s proposed new budget. It is aimed at helping homeowners and recovering the cost of the financial bailout. It would be levied over a 10-year period.

Bove is also critical of the recent $26 billion settlement between five of the country’s biggest banks and the government over foreclosure abuses.

Still, the Federal Reserve wins Bove’s largest vote for damage to banks.

“Fortunately, the banks do have volume,” says Bove. “In other words, this is going to be a volume versus margin argument.”

“And if volume continues to rise because loans continue to grow, they’ll offset what the Fed has done. The Fed is killing the banks.”

Bove says he’s seeing a big increase in lending, “which is where the banks make their biggest profits,” and overall, he thinks that bank stocks are still cheap.

Bove particularly likes Bank of America, Citigroup, US Bancorp and JPMorgan, even though JPM has the biggest risk in Europe.

Banking Business Review reports that U.S. banks are in process to gain more share of global trading revenue from two years as their European counterparts reduced risk in the fourth quarter amid worsening Europe's debt crisis, which eroded trading of European banks.

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Wednesday, 15 February 2012 07:59 AM
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