Canaccord Genuity North American Portfolio Strategist & Quantitative Analyst Martin Roberge suggests that American banks tend to see earnings pick up about a year after American homebuilders. Housing starts in 2012 gained serious momentum after Labor Day, and well into the fall hitting levels not seen since 2008. As the economy continues to recover throughout 2013, banks will begin to see businesses hum like they haven't seen in some time. The S&P 500 Financials Index lost $2.4 trillion in value between February 2007 and March 2009. To get that back there will have to be one heck of a rally. You thought 2012 was something. Just wait for 2013.

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Large Caps
Goldman Sachs (NYSE:GS) believes investors should be buying large-cap United States bank stocks in 2013. They reason that the U.S. economy and stock markets will both have reasonably strong years. In addition, the Fed's monetary policy of buying mortgage backed securities, which was in part intended to help borrowers, hasn't driven mortgage rates down by very much. That means the gap between the 30-year loan rate and the yields on the bonds that hold the mortgages has risen to 1.7 percentage points (a record) indicating lenders are generating more revenue. The downside is that the banks are having a hard time keeping up. Eventually they'll have to hire new staff to speed up the process. Finally, Goldman, like the analyst at Canaccord Genuity sees the housing market's improvement in 2012 as an indication of good things to come in 2013.

SEE: How Interest Rates Affect The Housing Market

Greater Focus
Increased regulation will have the unintended consequence of forcing banks to specialize in what they do best rather than trying to please everyone. As a result, business units that don't fit into a company's specific focus will be sold off to other buyers. Although global M&A activity is expected to slow in 2013, the banking industry should remain quite busy as a result of this move to specialize. Silicon Valley Bank, a division of SVB Financial (Nasdaq:SIVB), which provides a diversified group of products and services to entrepreneurs in the U.S., China, India, Israel and the United Kingdom, is a perfect example of the type of bank that's going to thrive in 2013. Companies with strong balance sheets and even stronger missions will meet with success in the coming year. Whether that translates into a second consecutive year of stellar gains is up to Mr. Market.

Capital One (NYSE:COF) acquired ING Direct for $9 billion in February 2012, making it one of the largest banks in the U.S. In February 2013, The ING name will disappear altogether and in its place will be Capital One 360. While ING customers aren't too happy about the whole thing, it's an indication that consolidation is going to be a big story in 2013. Richard Barrington, a contributor to The Huffington Post, makes the excellent point that there are more than 7,000 FDIC-insured institutions trying to get onside with Basel III. Many smaller community and regional banks will simply throw in the towel rather than continue to struggle to meet the rigorous demands of increased regulation. This past August M&T Bank (NYSE:MTB) acquired Hudson City Bancorp (Nasdaq:HCBK) for $3.7 billion. Other large regionals like BB&T (NYSE:BBT) could jump into the fray if the targets are appealing enough. Valuations, while considerably higher today than at the end of 2011, are still below historical levels. There will be several multi-billion deals in 2013.

SEE: Understanding The Basel III International Regulations

Mobile Banking
Bain & Company surveyed 5,200 consumers about their smartphone usage for mobile banking; one-third indicated they had done some type of banking transaction in the previous three months, up from one-fifth in 2011. The most important aspect of mobile banking usage is that it increases with income - up to a point. The wealthy tend to look down on mobile banking because it doesn't provide the personal touch they're looking for. This makes it a tricky call for banks because the affluent deliver tremendous economic value unlike any other type of customer. It's estimated that converting 1% of affluent customers, who are detractors of a bank, into promoters of the bank is worth $250 million in lifetime net present value. Therefore, banks will continue to use mobile banking to service the mass market while leaning on the branch network to provide higher margin services to the affluent. Banks will copy multi-channel retailers combining the various distribution channels in a positive customer experience. Winners in mobile in the big bank category will continue to be JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC), who've jostled in the top two spots for the last couple of years.

The Bottom Line
It looks like 2013 is going to be a very exciting year for banks and quite possibly even better than 2011.

At the time of writing, Will Ashworth did not own any shares in any company mentioned in this article.

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