Big bank glory days are over

Apoc Terror

By Jed Horowitz

NEW YORK (Reuters) – The summer of 2012 may be remembered as the time when regulation, scandals and a protracted slow-growth economy finally caught up with big American banks.

Ever since the financial crisis, U.S. banks and their investors have held out hopes of a return to the good times, when lending profits steadily rose and commercial and investment banking flourished together. But analysts and investors are now questioning whether things have changed for good.

“My gut says all these megabanks are worth more separately than combined,” said Bill Black, managing partner of Consector Capital, a hedge fund that focuses on bank trading. Smaller, more focused banks could attract investors, satisfy regulators and increase depressed stock prices, he said.

Seven of the 10 biggest U.S. banks beat analysts’ average earnings expectations in the second quarter. But much of that came from cutting costs and dipping into money…

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