Ep. 129 - Investor sees inflection point in bank stocks

Street Talk

Bank stocks and regional bank stocks in particular have rallied over the last month and there is further room to run, according to Joe Fenech, Chief Investment Officer at GenOpp Capital Management. In the episode, recorded on July 16, Fenech said that sentiment towards bank stocks is improving and that the long bear market in bank stocks ended in May 2023. The investor argued that the recapitalization of New York Community Bancorp earlier in 2024 could serve as the turning point of this investment cycle now that “smart money” has rescued one of the sector’s biggest problems. He also sees net interest margin pressure easing and eventually becoming a tailwind for banks and argued that not all commercial real estate (CRE) loans should be seen as high risk and resulting in sizable losses. He also believes M&A activity will increase, driven by succession issues and the need for scale and technology investment.