November 3, 2016 / 4:56 PM / 2 years ago

BRIEF-Blackrock's Moore says renting may be the better option for most bank stocks at this time

Nov 3 (Reuters) - Blackrock’s strategist Kate Moore :

* “Bank profitability in developed markets is unlikely to return to pre-crisis levels, in our view”

* “We conclude renting may be the better option for most bank stocks at this time”

* Bank profitability in developed markets “may never see a return on equity in the range of 15% to 20% again”

* “U.S. Bank revenues will likely benefit more than in past rate-hiking cycles as the fed slowly raises rates”

* “We favor U.S. Banks over global peers due to strong fundamentals and a more robust economic backdrop”

* “See regional banks benefitting from an easier regulatory environment”

* Structural challenges like low growth, low rates,regulatory pressure remain, cut into some banking sector’s net interest margins

* “even if Japanese banks pursue new business and overhaul their cost structures, we see sector profitability remaining under pressure”

* see banking group “as a less compelling long-term investment and recommend selectivity”

* “Chinese banks are trading at low multiples, and may show up on value screens”

* Our Asia equities team turned positive on banking sector, but “we see better opportunities in emerging markets outside of China”

* “Strong economic growth, high short-term rates,demographic trends are favorable for banks in India, Indonesia, Mexico,Turkey, we believe”

* “Brazilian and Russian banks could see earnings upside once economic recoveries take hold there”

* see any meaningful re-rating of European bank valuations capped by still-muted profitability,limited growth prospects,concerns over balance sheet health,regulatory issues Further company coverage:

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