I agree with most of the comments on this thread. When I looked at American banks last year, the things that jumped out at me were the historically high capital ratios, low NIMs, high liquidity, low delinquency rates and the above mentioned consolidation and regulatory issues.
Some of these factors are present in some European markets. The two I’ve looked at closer, the UK and Ireland, now look more like Canada in terms of concentration, yet their ROA’s are significantly lower. I wonder what the chances of them moving towards Canada-like returns on capital are.
FWIW, the one I am liking is RBS. It feels like BAC from 3-4 years ago: grew into a very complex organization before the financial crisis, endless fines, litigation and restructuring expenses masking a profitable core business, unsuccessful stress tests. But it now has a strong capital position, a very nice core business -which is now mainly retail and commercial banking in the UK-, is winding down its “bad bank” and with the agreement with the DOJ on the RMBS issues, seems to be past most of its legal and restructuring costs. A dividend is likely later this year when (if?) they pass the next stress test. Nicer would be share repurchases. The government owns a majority of RBS, not sure if they would be able to buy back some of the government’s holding.