Big banks shares could expand 25pct

NEW YORK: Shares in big banks like Bank of America Citigroup and Goldman Sachs are undervalued due to economic and regulatory concerns and could rise more than 25 percent in the next year, according to financial weekly Barron's.

These banks, including JPMorgan Chase, Morgan Stanley and Wells Fargo, are currently available at prices near book value or a discount from book value, the paper said.

In particular Bank of America, Citigroup and Morgan Stanley are trading below tangible book value it said.

The stocks are currently being held back by tighter regulation, more stringent capital rules, an ailing economy, weak loan growth and ongoing mortgage weakness, the paper said.

Patient investors will benefit from the stocks if they have two to three year horizon.

Copyright Reuters, 2011