TFC - How a Blue Wave would break in the regional bank consumer finance space: Wolfe

In the event of a Blue Wave prevailing in Tuesday's election, higher taxes would make it more difficult for regional banks and consumer finance companies on the lower end of the ROTCE spectrum to cover their cost of equity, writes Wolfe Research analyst Bill Carcache.Such companies include Comerica ([[CMA]] +3.1%), Zions Bancorporation ([[ZION]] +2.6%), and Ally Financial ([[ALLY]] +3.3%); that pressure suggests that they would continue to trade below tangible book value, he said.Ally's outlook for improving margins and revenue growth, though, gives it some potential for multiple expansion."At the other end of the spectrum, we view the (credit) cards as the greatest creators of value at this point in the cycle given the meaningful excess of their ROTCEs above their cost of equity," Carcache writes.He estimates a 7 percentage point increase in federal statutory corporate tax rate would result in ~3-7 percentage point increase in the effective tax rates

For further details see:

How a Blue Wave would break in the regional bank, consumer finance space: Wolfe