Despite these concerns, the analyst remains confident that short-term bank earnings will remain healthy and that yields are attractive. He reiterated his Market Perform rating for the sector. <\/p>\n
Canadian banks trying to grow their wholesale businesses should benefit from the SEC's fraud case against Goldman Sachs, says John Reucassel, an analyst at BMO Capital Markets. But the growing hostility towards the U.S. financials sector may ultimately prove bittersweet.<\/p>\n
"On the one hand, this development should continue to distract major competitors as some of the Canadian banks build out their non-Canadian wholesale banking businesses," Mr. Reucassel said in a note to clients. <\/p>\n
"On the other hand, we do worry about valuations of wholesale businesses in this environment." <\/p>\n
In particular, Mr. Reucassel said wholesale banking results of both Royal Bank of Canada<\/a> and National Bank of Canada<\/a> could be negatively impacted. <\/p>\n Despite these concerns, the analyst remains confident that short-term bank earnings will remain healthy and that yields are attractive. He reiterated his Market Perform rating for the sector. <\/p>\n