Outlook for 2025: Will the bullish market for US bank stocks continue with the tailwind of Trump 2.0? Check out the 16 promising bank stocks!

moomooニュース米国株 wrote a column · Jan 8 00:09

This article uses automatic translation in part.

On January 6th, the Federal Reserve Board (FRB) announced that Michael Barr, who is responsible for supervising and regulating financial institutions, will resign on February 28th.If the successor is approved, the resignation will happen prior to that. However, the FRB director is expected to remain in office until the end of the term in January 2032.

Mr. Barr was nominated by President Biden in 2022.Amendments to US banking capital regulations (Basel III) were pushed forward.After his resignation announcement, he pushed forward.
After the resignation announcement by the same person, it is linked to the US banking sector index. $Spdr S&P Bank Etf (KBE.US)$ Temporarily rose by 2% (as of January 7th) .

Outlook for 2025: Will the bullish market for US bank stocks continue with the tailwind of Trump 2.0? Check out the 16 promising bank stocks!

Linked to the Regional Bank Sector Index in the USA $Spdr Series Trust S&P Regional Bkg Etf (KRE.US)$ Also temporarily rose by over 2% (as of January 7th) linked to the US regional bank stock index.

Federal Reserve Board Vice Chairman resigns, is it to avoid confrontation with the upcoming Trump administration?

Mr. Barr stated in a declaration on January 6 (Monday),Suggested voluntary early resignation to avoid confrontation with the upcoming Trump administrationReached an all-time high last week.

"The role of Vice Chairman for Supervision was created after the global financial crisis to expand the responsibilities of the FRB in supervision and financial system regulation, with the aim of enhancing transparency and accountability. Discussions surrounding this position entail risks of deviation from its mission. At this point, Mr. Bar stated in the statement, "I have determined that I can contribute more effectively to the American people as a director."

Related Links:https://www.federalreserve.gov/newsevents/pressreleases/other20250106a.htm

Just recently, the Trump administration was criticizing the Fed's proactive stance on bank supervision, even though he had been a major supporter of strengthening oversight. The differences in their positions had sparked speculation externally about the possibility of Trump attempting to dismiss Barr after taking office. Bloomberg reported on Barr's resignation.Increased uncertainties surrounding the future of the "Basel III" regulations in the United States.US banking regulation strengthening, with easing due to Barr's resignation.

US banking capital regulation (Basel III) amendment proposal.
Amendments to US banking capital regulations (Basel III) were pushed forward.isA Bank with assets exceeding 100 billion dollars.Approximately 16% capital increase is being requested.Among them, there is a possibility of a 19% increase in capital requirement for the top 8 US banks.The proposal aims for major banks to hold more capital for future losses and financial crises.There is a possibility of being asked to increase capital requirements for the top 8 US banks to 19%.The proposal aims for major banks to hold more capital for future losses and financial crises.

The proposal aims for major banks to hold more capital for future losses and financial crises.The proposal aims for major banks to hold more capital for future losses and financial crises.
However, $JPMorgan (JPM.US)$ 、 $Goldman Sachs (GS.US)$ and $Bank of America (BAC.US)$ETC, major US banks and industry associations all simultaneously raised objections.

Under strict capital requirements, banks have no choice but to raise lending rates to offset capital costs. This could increase the cost of corporate and individual funding, suppress investment and consumption, and potentially have adverse effects on economic growth. With the increase in capital requirements, banks will be more selective in choosing borrowers, making it harder for small and medium-sized enterprises and individuals to obtain loans. Furthermore, as capital requirements rise, funds available for dividends and share buybacks at banks decrease, potentially reducing the attractiveness of bank stocks and decreasing returns to shareholders.

Analysts pointed out that with Mr. Barr's resignation, these capital regulations may be completely put on hold.

Brian Gardner, Chief Washington Policy Strategist at investment bank Stifel, stated in a research report, "Mr. Barr's resignation was somewhat unexpected, but beneficial for the banking sector." He added that Federal Reserve officials may consider easing financial supervision, pausing merger approvals, and further capital strengthening measures.

Check out the promising bank stocks with a tailwind in Trump 2.0!
With the upcoming inauguration of the next President Trump,The resignation of Mr. Barr seems to have elicited concessions from regulatory authorities in the USA banking industry.。
Based on this, Promising U.S. banking stocks benefiting from Trump 2.0are organized as follows:

●U.S. Megabanks
MegabanksAmong the financial stocks of US stocks,Banks with a sales ratio in the USA and Americas of over 40%,fromselected the top 6 companies by market capitalization.determined to be selected.

Specifically, $JPMorgan (JPM.US)$ 、 $Wells Fargo & Co (WFC.US)$ 、 $Goldman Sachs (GS.US)$ 、 $IMAC Holdings (BACK.US)$ 、 $Morgan Stanley (MS.US)$ and $Citigroup (C.US)$Contains.

●Major local banks in the USA
地方銀行The S&P Regional Bank Select Industry Index (SPSIRBKT)Top 10 stock selection from the portfolio.was selected.

Specifically, $Truist Financial (TFC.US)$ 、 $Citizens Financial (CFG.US)$ 、 $Huntington Bancshares (HBAN.US)$ 、 $M&T Bank (MTB.US)$ 、 $Regions Financial (RF.US)$ 、 $First Horizon National (FHN.US)$ 、 $Western Alliance Bancorp (WAL.US)$ 、 $Zions Bancorp (ZION.US)$ $East West Bancorp (EWBC.US)$ and $Synovus Financial (SNV.US)$ contains the Stem Inc.

※As of January 7, 2025, these are the current figures (according to our research).
*The content posted is as of the time of creation and does not guarantee the current numbers. Also, it does not solicit or recommend specific products or brands.

This article uses automatic translation in part.
Source: MOOMOO, Bloomberg, CNBC
- MOOMOO News Kingsley