Investors and bank executives can't seem to agree on which direction bank stocks are headed.
In a survey released by RBC Capital Markets Tuesday, 39% of investors and financial services executives predicted that bank stocks would perform worse this year than in 2010, while nearly just as many, 36%, said that they would perform better. The rest, 25%, expect no change.
The survey polled 145 investors and financial services executives who attended RBC's Financial Institutions Conference in Boston last week.
When asked what they believe is the largest threat to the banking sector, 44% of respondents cited the regulatory climate and 39% said lack of loan growth.
Yet plenty of investors are bullish about loan demand. Asked what would have the most positive impact on bank stocks this year, 43% of those surveyed said loan and revenue growth.
"After three years of volatility, regulatory uncertainty, and mixed performance in the banking sector, investors seem and financial professionals appear to be genuinely unsure about which direction bank stocks will take during the coming year," said Gerard Cassidy, managing director and senior U.S. banking analyst for RBC Capital Markets.
Looking further ahead, 41% of respondents said that the best opportunities for bank investors over the next five years would be in the so-called BRIC nations — Brazil, Russia, India and China — while 31% said that the best investments would be in the U.S. The remaining 28% predicted that European and Canadian banks would generate the best returns for investors.
