Magazine article American Banker

Wall Street Sharpshooters: Top-Ranked Thrift Analyst Sees Unfair Neglect of Sector

Magazine article American Banker

Wall Street Sharpshooters: Top-Ranked Thrift Analyst Sees Unfair Neglect of Sector

Article excerpt

As Vivek Junega sees it, the thrift industry is undergoing a historic transformation.

There has been "a sea change in management, their thinking, and the way they run their business," said the J.P. Morgan & Co. thrift analyst.

The companies, he says, are "reducing their dependency on mortgages while broadening their product profile and improving their profitability."

Mr. Junega knows whereof he speaks. He took first place in American Banker's Wall Street Sharpshooters ranking of analysts who cover the thrift industry and Fannie Mae and Freddie Mac. Out of five analysts, he made the most accurate estimates of earnings, according to data compiled by First Call/Thomson Financial.

As thrifts reinvent themselves, Mr. Junega says, the biggest winners are larger institutions that have broadened their product lines and become more "bank-like." Classic examples are Charter One Financial and Washington Mutual Inc., which are focused on building their retail banking businesses.

Other thrifts are pursuing niche businesses.

Mr. Junega cited Dime Bancorp, which has made itself into a national mortgage company, and People's Bank, which has focused on expanding its credit card operation.

As such strategies unfold, "you could end up with some savings and loans that are neither able to make the transformation or attractive enough for anyone to want to acquire," Mr. Junega said. "They would just muddle along."

Mr. Junega has been at Morgan for 10 years, spending the past three years on his current group of companies. He is known for doing his homework thoroughly.

"What stands out about Vivek is that no matter what hour of the day or night, you can expect a call from him asking a detailed question," said Ellen Goldberg, vice president for investor relations at Fannie Mae. "He is one of the smartest and most thorough of the analysts that follow our stock. …

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