'Fast Money' traders talk the state of the Big Bank sector heading into 2026

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Guy Domy.

Guy Adami (Director of Advisor Advocacy) 00:01.120

Yes, sir.

? (Host) 00:01.720

Great year. I know you've been on them.

? (Host) 00:04.200

No, you have

Guy Adami (Director of Advisor Advocacy) 00:04.720

been.

? (Host) 00:05.560

Good calls. What's going to happen next year?

Guy Adami (Director of Advisor Advocacy) 00:08.680

First of all, Karen's been on top of it and Tim has who's in absentia. I believe he's in Europe right now. Terms of the banks, some we've gotten rights, a lot of them I've gotten wrong, but Citibank is the one that continues to stick out to me and we can talk about what a great

Guy Adami (Director of Advisor Advocacy) 00:21.720

job Jane Fraser has done. There's this getting, you know, getting themselves out of bad businesses, focusing on what's working, the restructuring to bring him to the bank, but if JP Morgan, and we've done this math problem, is worth three times tangible book-ish, I think it's

Guy Adami (Director of Advisor Advocacy) 00:36.920

fair to say that Citi should be half of that. And half of that gets you about $148 stock. And we've been pretty consistent on this. That's where I think it's going. And although Citi's had a huge run off the lows that we saw earlier in the year, I think there's still a lot of

Guy Adami (Director of Advisor Advocacy) 00:51.840

room to the upside here in Citi.

? (Host) 00:53.760

The interesting thing, Karen, about Citigroup is that Jane Fraser has done a great job. And one of the things she's done is to get bigger in terms of the stock valuation by getting smaller shrinking the company. She This is not a winner take all strategy. She I feel like she's

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being very targeted, very smart about just ditching businesses that she doesn't need. Doesn't want.

Karen Finerman (Co-Founder & CEO) 01:16.040

Right? Well, also she's been really good about trying to get them integrated to be one bank after just a series of acquisitions over decades that were never put together. And I mean she's created a culture there where I think, you know, building the asset wealth management

Karen Finerman (Co-Founder & CEO) 01:32.840

business, but it is a great time for banks overall. It doesn't get any better than this. The economy's growing, regulation is heading their way, credit quality is great, capital markets are really good and looking to be just as good next year, then you have the asset wealth

Karen Finerman (Co-Founder & CEO) 01:47.400

management business. All of that's great. And then you have AI making banks. They're a great candidate for what's a business that could be so much more efficient than it is. If you could cut out 2% of expenses You can increase your margins because the margins are so thin in

Karen Finerman (Co-Founder & CEO) 02:02.880

banks. That's a fantastic setup. That's why they're up this much. But just because it's the year's ending, I'm not going to sell my banks and look for something new. I

? (Host) 02:10.720

You think still you like what's happening you're still on it. You're keeping it.

Karen Finerman (Co-Founder & CEO) 02:12.720

City City is the sea in my carb trade.

? (Host) 02:15.560

Yeah.

Karen Finerman (Co-Founder & CEO) 02:16.280

Um that I get a lot of guff for.

Karen Finerman (Co-Founder & CEO) 02:19.480

Why? That would be a word guy would use. You get Well,

Guy Adami (Director of Advisor Advocacy) 02:22.000

you know, these anagrams and you know carb and energy is an O I H. It's very odd.

? (Host) 02:27.440

As I As the energy guy, I I fully endorse The OIH. XOM whatever we'll get the XOM in a bit guy me just settle down.

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148 on City Group would you agree with guys take?

Steve Grasso (CEO) 02:41.760

Yeah, I mean you have the economy have D reg you have a host of things that are going right investment banking fees are up 50% probably across the board is it something that I want to buy now probably not I think you got to let these things breathe. I think you go into a new

Steve Grasso (CEO) 02:57.120

year there's the CapEx spend there's IPO markets, there's M&A, there's tax cuts, there's immediate expensing. You could name all the all the things that are tail winds. What are the head winds? If the economy slows, if if if people if unemployment rate moves higher, then you're

Steve Grasso (CEO) 03:19.000

going to have less loan demand. So I think there's a host of things that could happen. Even if rates come down, there's a sweet spot for net interest margins where if rates come down precipitously, those margins will get squeezed. So, I think you have time to wait on the banks.

Dan Nathan (Principal) 03:33.400

Yeah, I I just think at least the investment banks, Morgan Goldman, I think they price a lot in right now. I mean, you're going to keep continue to hear, capital markets, you're going to continue to hear about the IPO. I mean, while the IPO market was up a lot this year, I mean,

Dan Nathan (Principal) 03:45.800

it's coming off a very small base and next year, it's really dependent on these massive names, right? And I suspect, you know, this is the time of the year, you kind of make some big proclamations or whatever. I suspect that one of these big names in the AI space that a lot of

Dan Nathan (Principal) 03:59.320

folks are hoping being that goes public next year actually blows up and it goes the opposite way. And we see a lot of reverberations, whether it be the banks that are lending to these folks. You just can't you know VCs have some whoa.

? (Host) 04:12.120

That's That's a big That's what you just said. This is what Dan Nathan does. You just you kind of Yeah put the very team calmly dropped the bomb in there. I assume you're talking about the Tussel headed guys company out in San Francisco. Well, listen, if they can't a couple

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hundred billion in valuation. If they