If 2010 was the year for bank failures, 2011 could shape up to be the year for bank recoveries. Another round of stress tests for the 19 largest banks could provide an added dose of confidence to regulators, investors, consumers, shareholders, and even analysts.  In March, the Federal Reserve will release the results. “While there are still fundamental headwinds that the industry faces as earnings normalize over the next few years, we believe the majority of the “crisis” issues (collateralized debt obligations, subprime, asset-backed commercial paper, mortgage putbacks, etc.) are quantifiable with some degree of certainty,” says banking and financial services analyst Anthony Polini.

The struggling economy and bad loans brought down the banks in 2010. Today, however, the macro-economic outlook has improved.  “People are starting to wake up to the fact that these banks have a lot of earnings power and excess capital that will be returned to shareholders going forward,” Polini says in this edition of Professionally Speaking, hosted by Larry Pugliese.

You can access this audio presentation by visiting the Raymond James website at raymondjames.com/experts/polini.htm.  To listen, you may have to download and install Quick Time, Windows Media Player or Real Player. The software is free, and the download, available in the Professionally Speaking section of my/our website, should only take a few minutes.

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