I really believe that history repeats itself. In 1990 the balance sheets of the banks were shaped up because of the financial crisis that had existed before that time. The same thing is happening now. There's so much cash in some of the banks in the United States that they're actually selling at below their cash value per share. For example, Citigroup, Bank of America, Bank of New York, State Street, Northern Trust, they all sell at below their cash per share. What that means is these banks all have a tremendous amount of liquidity, which ultimately can be put to use to generate further earnings growth.
I think for the next 2-3 years, what you will see is that banks will actually increase their earnings at about a 20% rate per year which will be far faster than what you're going to see from the industrial averages.
~Dick Bove, Rochdale Securities, CNBC interview, January 13, 2011