Fears over the European debt crisis sent the market lower Monday, with financial stocks leading the way. But Rochdale Securities’ Dick Bove says what’s happening in Europe is actually helping U.S. banks.
“The irony of what’s going on right now is that the banks are benefiting at the moment from what’s going on in Europe,” Bove told me on last night’s Kudlow Report. “The European banks are selling American assets to American banks at discounted prices, which is creating a benefit for the American banks.”
The fact is that banking companies are in pretty good shape, Bove noted, adding that there should be no worries about funding issues since U.S. banks are flush with cash. In fact, he thinks U.S. banks are overcapitalized.
“If you take all the numbers going back 75 years to when the FDIC was first created,” he said, “we’ve never had this high a level of capital plus reserves as a percentage of assets in the banking industry, ever.”
Plus, Bove said deposits are pouring in as people fearing what’s happening in the market put money in banks. “The banks have too much liquidity right now; too much capital right now,” he said. “There is no funding issue.”
Which banks are Bove’s picks? He likes JPMorgan Chase, U.S. Bancorp, and Morgan Stanley.