VIDEO - Mike Mayo says bank losses worse than Great Depression

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VIDEO - Mike Mayo says bank losses worse than Great Depression
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Recent actions by the U.S. government to support the banking sector won't stop loan loss levels from exceeding those reached during the Great Depression, banking analyst Mike Mayo of Calyon Securities said Monday.

Mike Mayo, a long-time bear on the banking sector who recently left Deustche Bank, started Calyon's coverage of the U.S. banking sector with an "underweight" rating, indicating investors should minimize exposure in their portfolio.

Though the comments in Monday's report largely reiterate those made in a report Mike Mayo released March 11 while still at Deutsche Bank, they underscore the lingering concerns among investors about the prospects for stabilization in the financial sector. Shares of banks have gained in recent weeks owing to the government intervention, hopes for improved earnings reports and thawing in credit markets, but uncertainty about the health of banks remains high.

Shares of banking sector stocks were leading the decliners in the S&P 500 index Monday morning. Shares of all 11 banks Mike Mayo mentioned in his report were down by more than 3% each in early trading.

Mike Mayo put "underweight" ratings on Bank of America Corp. (BAC), Citigroup Inc. (C) , JPMorgan Chase & Co. (JPM), Comerica Inc. (CMA), PNC Financial Services Group Inc. (PNC) and Wells Fargo & Co. (WFC). He assigned more- bearish "sell" ratings on BB&T Corp. (BBT), SunTrust Banks Inc. (STI), U.S. Bancorp (USB), Fifth Third Bancorp (FITB) and KeyCorp (KEY).

VIDEO - Mike Mayo says bank losses worse than Great Depression