Could see bigger bank mergers in first half of 2026, says UBS' Erika Najarian
December 24, 2025 • 5m 53s
Kelly Evans (Anchor)
00:00.070
here
to
give
us
her
take
on
the
best
and
worst
position
is
erica
nigerian
senior
large
cap
bank
and
consumer
finance
analyst
at
UBS
erica
what's
driving
this
i
know
for
a
bank
like
goldman
this
is
the
second
year
now
of
really
strong
returns
so
are
we
starting
to
get
back
to
Kelly Evans (Anchor)
00:15.150
less
interesting
entry
points
or
no
Erika Najarian (Senior Equity Research Analyst)
00:18.990
so
you
know
you
asked
first
what's
driving
it
it's
really
three
things
number
one
it's
deregulation
number
two
it's
the
return
or
the
acceleration
of
activity
levels
whether
it's
capital
markets
which
is
clearly
impacting
goldman
stock
or
lending
and
lending
to
middle
market
Erika Najarian (Senior Equity Research Analyst)
00:34.470
companies
hopefully
into
next
year
and
the
third
would
be
the
dream
of
a
steeper
yield
curve
and
those
are
really
the
preconditions
for
outperformance
now
can
this
continue
i
think
you
have
to
be
a
little
bit
selective
in
how
you
ride
the
momentum
into
two
thousand
twenty
six
Erika Najarian (Senior Equity Research Analyst)
00:50.790
because
it
is
rare
it
is
rare
that
banks
stocks
outperform
the
S
and
P
for
two
years
in
a
row
and
when
they
do
it's
typically
when
they
come
out
of
recessionary
periods
so
they're
coming
from
much
much
lower
valuation
points
the
only
time
they
outperformed
in
a
non
sort
of
Erika Najarian (Senior Equity Research Analyst)
01:07.870
recovery
scenario
was
ninety
four
ninety
five
so
we'll
see
if
we'll
have
that
kind
of
sort
of
unicorn
two
years
for
the
stocks
right
Kelly Evans (Anchor)
01:15.430
and
bank
of
america
is
one
of
your
picks
for
next
year
so
is
capital
one
and
huntington
and
tell
us
why
Erika Najarian (Senior Equity Research Analyst)
01:20.630
sure
so
for
bank
of
america
the
valuation
is
still
undemanding
and
you
get
all
of
the
things
that
i
mentioned
D
reg
you
know
exposure
to
a
steep
curve
and
the
acceleration
activity
levels
in
both
the
lending
side
and
capital
market
side
for
more
reasonable
valuation
that
you're
Erika Najarian (Senior Equity Research Analyst)
01:37.950
seeing
in
JP
morgan
for
example
morgan
stanley
or
goldman
sachs
without
really
sacrificing
quality
you
know
capital
one
in
my
opinion
is
a
multi
year
story
you
know
keep
in
mind
that
while
very
tethered
to
the
consumer
they
have
actual
competitive
advantage
and
that
they're
one
Erika Najarian (Senior Equity Research Analyst)
01:55.350
of
one
in
terms
of
being
both
a
debit
issuer
and
a
network
in
the
united
states
and
one
of
four
global
credit
card
networks
around
the
world
and
for
huntington
look
i
think
the
message
for
me
too
here
is
that
the
regional
banks
have
not
participated
in
the
rally
as
much
as
the
Erika Najarian (Senior Equity Research Analyst)
02:11.270
money
centers
have
and
i
think
it's
time
for
them
to
shine
in
two
thousand
and
twenty
six
so
huntington
is
one
of
the
best
position
banks
it's
done
two
deals
texas
already
it
has
outsized
growth
relative
to
peers
and
it's
got
a
great
management
team
erica
Steve Liesman (Senior Economics Reporter)
02:27.910
first
of
all
it
looks
like
you're
really
primed
there
for
christmas
i'm
looking
at
the
tree
and
you
got
the
wreath
beautiful
and
the
stockings
on
the
on
the
fireplace
looks
awesome
but
here's
my
question
and
i
want
to
it's
a
two
parter
what's
the
deregulation
worth
to
the
banks
Steve Liesman (Senior Economics Reporter)
02:45.870
and
is
it
worth
more
to
the
smaller
banks
than
the
bigger
banks
Erika Najarian (Senior Equity Research Analyst)
02:50.520
so
the
deregulation
is
worth
about
a
hundred
fifty
basis
points
near
term
and
returns
now
we're
in
a
very
commoditized
business
and
jamie
dimon
loves
to
paraphrase
jeff
bezos
your
margin
is
my
opportunity
so
that's
sort
of
a
short
term
opportunity
for
roe
however
what's
very
Erika Najarian (Senior Equity Research Analyst)
03:08.840
different
steven
this
administration
versus
last
is
a
lot
of
the
D
reg
has
actually
focused
on
the
money
center
banks
so
under
trump
one
point
oh
it
was
very
regional
bank
focus
and
this
time
around
it's
big
bank
focus
and
that's
why
that's
why
the
gap
between
you
know
book
Erika Najarian (Senior Equity Research Analyst)
03:26.190
valuation
and
future
arrows
is
wider
with
the
money
center
banks
because
they're
anticipating
a
much
steeper
improvement
in
returns
on
equity
OK
Steve Liesman (Senior Economics Reporter)
03:34.910
here's
the
most
complicated
question
i
think
i
can
ask
on
national
television
you're
ready
ready
Erika Najarian (Senior Equity Research Analyst)
03:39.870
i
happen
to
Steve Liesman (Senior Economics Reporter)
03:40.470
know
having
covered
this
dismal
industry
for
a
very
long
time
that
banks
do
not
want
to
merge
because
they
don't
want
to
reach
a
regulatory
cap
in
other
words
don't
get
bigger
than
X
because
then
you're
subject
to
worse
regulations
under
the
trump
administration
and
the
new
Steve Liesman (Senior Economics Reporter)
03:57.710
regulatory
regime
at
the
fed
is
that
any
longer
a
constraint
and
as
a
result
could
you
expect
to
see
potentially
some
bigger
mergers
that
put
some
of
the
bigger
regionals
together
that
now
might
require
or
necessitate
or
otherwise
attract
a
premium
because
of
that
those
mergers
Erika Najarian (Senior Equity Research Analyst)
04:16.470
and
i'd
be
a
little
bit
of
a
grinch
this
christmas
you
do
you
know
why
banks
don't
merge
because
you
could
be
like
the
king
of
your
country
club
make
tons
of
money
and
you
know
be
one
of
four
thousand
banks
and
not
be
under
scrutiny
right
banks
are
sold
and
not
bought
so
there
Erika Najarian (Senior Equity Research Analyst)
04:33.950
hasn't
been
a
significant
motivation
right
because
you
can
you
know
make
a
decent
amount
of
money
and
whatever
so
just
that's
just
me
being
grinchy
but
to
your
question
i
think
that
investment
bankers
are
not
having
fun
christmas
i
think
you
could
see
big
sweeping
announcements
Erika Najarian (Senior Equity Research Analyst)
04:51.310
in
the
first
quarter
and
in
the
second
quarter
of
next
year
why
do
i
say
it's
front
loaded
because
you
do
have
the
midterms
coming
up
right
and
while
the
administration
's
permit
permissiveness
in
terms
of
large
deals
should
last
through
the
duration
of
the
presidency
you
know
Erika Najarian (Senior Equity Research Analyst)
05:07.510
there's
still
a
little
bit
of
hesitation
in
terms
of
doing
large
sweeping
deals
if
you're
going
to
get
yanked
in
front
of
congress
and
you
know
explain
that
deal
but
i
i
do
think
by
the
way
all
of
those
sort
of
limitations
that
would
sort
of
cap
your
desire
to
grow
as
part
of
Erika Najarian (Senior Equity Research Analyst)
05:25.710
the
deregulatory
construct
right
they're
trying
to
get
rid
of
those
sort
of
you
know
false
like
you
know
levels
where
you're
saying
OK
i
can't
reach
seven
hundred
billion
because
then
i
will
have
much