Smith Barney: Fed Hike Would Boost Bank Stocks

Rieker, Matthias
June 2004
American Banker;6/3/2004, Vol. 169 Issue 106, p20
Trade Publication
U.S. bankers and analysts who have been trying to persuade investors not to sell bank stocks when interest rates rise say higher rates will improve profit margins. Most traders say the argument may not convince investors, but Albert D. Richards, a small- and mid-cap strategist at Citigroup Inc.'s Smith Barney, said bank stocks could outperform when rates rise. Mr. Richards wrote in a report on Wednesday that shares of regional banks outperformed for six months after the Federal Reserve raised interest rates in 1994. Though banks underperformed when the Federal Reserve raised rates in 1999, the current market is more like that of 1994, Mr. Richards wrote.


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