2013 has been kind to American money centre bank
shares, thanks to accelerating US growth momentum, a Bernanke Fed firmly on hold, the recent successful Fed stress tests, benign capital markets and the resurgence of the housing market.
The sell off since October creates an attractive entry point for Abu Dhabi's second largest money centre bank
. ADCB trades at nine times earnings and 1.6 times price/book value, cheap for a bank that can deliver a return on equity (ROE) of 18 per cent and a return on assets of 2 per cent.
This stellar outperformance was only possible after Wall Street rerated the valuation multiple on New York's most transformed money centre bank
. Even though his exit in a palace coup was a shock to the world, Vikram Pandit had repaid the US Treasury's $45 billion TAPP lifeline, slashed the payroll by 120,000, shed $500 billion in noncore assets, reoriented the bank to the high growth markets of Asia/emerging markets.
Summary: Bank of America is the US money centre bank
most exposed to the leverage metrics of the US consumer and most sensitive to higher US interest...
The most interest rate sensitive US money centre bank
is Bank of America, now inexpensive at 10 time forward earnings and trading just below its tangible book value.
This is mathematically impossible to replicate next year, though I still swoon over US money centre bank
The New York money centre bank
trades 10 per cent below its 55 high and its valuation is modest at 8.5 times earnings and well below book value.
Money centre bank
shares were the classic beneficiaries of the Trump reflation trade in 2017.
Even though Citigroup's share prices tripled since its chairman axed former CEO Vikram Pandit in a boardroom palace coup in November 2012, America's quintessential global money centre bank
still trades at book value.
I believe Citigroup has multiple catalyst to remain an outperformer in US money centre bank
The ten year US Treasury note yield spiked up to 2.42 per cent, a steroid shot for US money centre bank
stocks even while global equities got slammed by the carnage in the bond markets.
Money centre bank
shares have barely recovered 48 per cent of their epic falls during the post Lehman global financial crisis in 2008, vastly underperforming an S&P 500 index that has tripled since it bottomed in March 2009.