Financial Institutions – Banks: Second
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Financial Institutions – Banks: Second

Huw van Steenis & team

Morgan Stanley

Jumping from runner-up to second place is the nine-strong Morgan Stanley squad captained by Huw van Steenis. The London-based leader “does the best job of looking at the European banking sector from a big-picture perspective, such as highlighting the structural deleveraging pressures and putting them in a historical context,” explains one buy-side supporter. A key theme this year will be the “Balkanization of the banking markets,” says van Steenis, who with his crew covers 40 stocks. Protectionist measures implemented to reduce cross-border finance — in particular new trade barriers and limits on foreign direct investment — are “a real headache for those countries — particularly Spain and such periphery countries as Portugal, Greece and Ireland — which benefited from cross-border flows, and also for banks trying to run themselves on a global basis,” he adds. For now the analysts remain focused on what he calls a few “cheap banks” with strong earnings power in their core franchises that gives them a good chance of accelerating restructuring, exiting noncore assets effectively and introducing or increasing dividends. Current recommendations include Belgium’s KBC Bank, France’s BNP Paribas, Switzerland’s UBS and U.K.-based Barclays. — Leslie Kramer

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