Large Banks May Be Poised For Success In Today’s Market

In this article I use AAII’s A+ Investor Stock Grades to provide insight into three big bank stocks. Amid the challenges small banks face, is it time to consider larger banks? Check out these three stocks: Citigroup
C
, Fifth Third Bancorp
ITB
and JPMorgan Chase
JPM
.

Big Bank Stocks Recent News

From a broader perspective, there are reasons to maintain a positive outlook on large financial institutions. A consistent decline in the number of banks that started in the 1980s has resulted in a reduction of more than 70% in the number of FDIC-insured commercial banks and displays no indication of halting. The establishment of new banks has dwindled to a point of near insignificance, barely above 0%. Simultaneously, bank consolidations persist at an exceptionally elevated pace in historical terms: An informal report identified 119 announced bank mergers so far this year, as of October 24. As smaller banks struggle to comply with new regulations and address the challenge posed by consumer deposit flight, the banking sector’s concentration intensifies. This scenario may present significant opportunities for large banks.