NEW YORK–Bank stocks hit their highest point in nearly 10 years on Wednesday, riding a surging Dow that has lifted the values of most companies.
The KBW Nasdaq Bank index, a measure of 24 of the biggest U.S. bank stocks, rose more than 3% as it hit its highest level since late 2007. The gains brought its rise since Nov. 8 to about 32%. The index has outperformed the S&P 500 by around 20 percentage points during this time.
Leading the growth in bank stocks has been Bank of America, which is up 50% since the election of President Trump.
While the numbers are robust and show a dramatic increase since the economic crisis, one analyst noted that among the six biggest U.S. banks, only J.P. Morgan Chase and Wells Fargo have posted returns on equity for 2016 that exceeded the 10% level, which investors generally consider to be a bank’s cost of capital.
The $2.49-trillion J.P. Morgan, which represents almost 2.5 times the total assets of credit unions, is projecting it will close 2017 with approximately $2.6 trillion assets.