Five Banks Looking to Ride Housing Recovery Wave in 2013

Jan 14, 2013, 09:35 ET from

LONDON, January 14, 2013 /PRNewswire/ --

Amidst a changing regulatory environment, housing sector improvement, cyber attacks threats and overall economic conditions, these five stocks, KeyCorp (NYSE: KEY), Wells Fargo & Company (NYSE: WFC), Sun Trust Banks Inc. (NYSE: STI), PNC Financial Services Group Inc. (NYSE: PNC) and TCF Financial Corp. (NYSE: TCF), will be under our microscope today. Sign up to talk to our analysts on any of these stocks at

Money centers and regional banks continue to make progress and offer growth opportunities as 2013 gets underway. A rejuvenated housing market is the chief reason to be optimistic about banks but is hardly the only one. Lending activities are increasing, regulatory concerns are easing and capital levels are growing all while the financial sector in general is improving. The fact that so many banks may be considered undervalued at this time further underscores the attractiveness of the banking industry for investors. KeyCorp trading at 5% below its book value as recently as last Friday illustrates this point. See what our analysts have to say on KeyCorp for 2013. Sign up now:

Regulatory changes, while often feared by banks, have actually brought some positives in recent weeks. Changes to home loan lending rules have further brightened the outlook for 2013. The Consumer Finance Protection Bureau finalized new mortgage-orientation rules that should benefit a variety of banks. The new rules will help protect banks from lawsuits so long as they adhere to a set of guidelines for issuing a loan. Essentially, the new rules will help banks in two ways: a homeowners' legal recourse for not making monthly payments will be more limited and lending requirements will be clearer, allowing banks to confidently lend more. Ask our financial experts how these new rules will impact your banking stock by registering for free at

It has not been all good news on the regulatory front however. The conclusion of a long-running wrongful foreclosure settlement this week dented the wallets of 10 major banks. Wells Fargo & Company, Sun Trust Banks Inc. and PNC Financial Services Group Inc. were among banks that agreed to finalize a massive $8.5 billion aggregate settlement with the Office of the Comptroller of the Currency and other banking regulators. The upside to the deal is that banks can move forward, stop paying exorbitant consulting fees and refocus their efforts on regaining consumer confidence and increasing lending activity. Furthermore, the settlement will put cash back in the hands of potential homebuyers. Our analysts have interesting insight on Wells Fargo & Company, Sun Trust Banks Inc. and PNC Financial Services Group Inc. Talk to them today by signing up on

Continued improvement out of the housing sector will be a major driver for better performances from nearly all banks. Lending activities are increasing in conjunction with new home as well as pre-owned home sales. There are concerns that a sudden spike in unemployment or derailment of the economic recovery in general could quickly spoil the progress made in the last few months. However, if the housing market maintains its current trajectory, a much more lucrative year for banks would likely follow. See what our analysts think about the housing sector improvement momentum by joining us at

The housing market is not the only reason to be optimistic about banking this year. Many banks were active on the acquisition and expansion front last year as smaller banks were forced to divest assets below market value. Now, these moves are starting to yield returns.  KeyCorp's purchase of several HSBC branches exemplifies these efforts. A much improved banking environment now positions it to better capitalize on these assets.

The threat of cyber attacks on banks will also be worth tracking this year for investors. Sun Trust and PNC Financial were among regional banks targeted in some of the attacks. Neither bank suffered but it did function as a wakeup call for the industry to possibly increase spending on security at a time when banks are ill-suited to handle any declines in consumer confidence.

Overall, current economic conditions are favoring money center and regional banks.  Resolved issues that weighed on banks for much of last year are finally in the rearview mirror. Banks are becoming more and more growth-minded as unemployment slowly improves, the housing market recovers, consumer confidence increases, regulatory changes ease and broader economic conditions slowly brighten. TCF Financial Corp. has already seen shares improve by over 5% in the last 30 days and provides a good example of the direction the industry as a whole is moving in. There will almost certainly be some unforeseen hiccups along the way but banks are looking more and more capable of widening margins, growing revenues and most importantly, providing stability in both the near- and long-term. See how companies in this industry have grown over the past years and how they are expected to perform in the future. Talk to our analysts, sign up now for free at

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