The housing collapse and the banking collapse nearly brought on a total meltdown of the financial markets. Ever since, we have heard shrill cries of not having any financial institution that is too big to fail. Oversight and increases in capital requirements has slowly, but surely rebuilt trust in the banking sector. The large cap banking team at Deutsche Bank is very confident in the banking sector going forward, and in a recent research report they moved their price targets up on a list of top stocks to buy.

Fifth Third Bancorp (NASDAQ: FITB) is one of the two top stocks to buy at Deutsche Bank. Fifth Third remains one of best positioned large regional banks for the recent back-up in interest rates, given securities/earning assets represent just 15% versus about 20% for most peers. With earnings estimates above Wall Street for this year and next, the bank is poised for strong growth. Deutsche Bank raise its price target from $17 to $21. The Thomson/First Call estimate is at $20. Investors receive a solid 2.5% dividend.

Morgan Stanley (NYSE: MS) is the other top stock to buy at Deutsche Bank. The company reported stronger than expected second-quarter earnings, and the unexpected $500 million share repurchase authorization was a positive surprise. The analysts think that while this may not change the capital deployment story materially near-term, it was a strong vote of confidence by regulators and mgmt. The Deutsche Bank price target goes from $30 to $31. The consensus is lower at $29. Investors are paid a small 0.7% dividend.

Citigroup Inc. (NYSE: C) has been able to move more and more of the Citi Holdings assets off of its balance sheet, which continues to be a huge plus for the bank. The company posted a 42% increase in second-quarter profit that beat analysts’ estimates, as stock-trading revenue surged and losses on unwanted assets declined. Deutsche Bank raises its price target on the stock to $61 from $52. The consensus price target for the stock is at $59.50. Investors are paid a tiny 0.1% dividend.

J.P. Morgan Chase & Co. (NYSE: JPM) has a strong balance sheet with ample loan loss reserves, but also has exposure to rebounding capital markets and consumer trends, which should propel earnings power going forward. An improving economy also is putting a wind behind the banks efforts to increase their domestic business. Deutsche Bank moves its price target from $53 to $64, while the consensus figure is at $62. Investors receive a 2.7% dividend.

PNC Financial Services Group Inc. (NYSE: PNC) posted very strong second-quarter results, like many of the top stocks to buy, and is poised to benefit from better fee income and lower credit costs in the future. Deutsche Bank lifts its target from $74 to $86. The consensus price objective is $78. Shareholders are paid a 2.3% dividend.

U.S. Bancorp (NYSE: USB) has been mentioned as a possible buyer for Ally Financial. It may make sense, if and when Ally trims some of its giant auto loan portfolio, which is the remnants of GMAC. Deutsche Bank raises its price target on this top regional name to $41 from $38, and the consensus target is at $39. Investors receive a solid 2.5% dividend.

As a reminder, we just pointed out this week how the major banking stocks are now trading above their respective book values.

Many Wall Street firms are bullish on the financial sector going forward. In many cases, banks can do well in a rising interest rate environment, and that appears to be a very foreseeable outcome in the next 12 to 18 months. Banks also may be raising their dividends as their capital requirements are met and maintained. It makes sense for a well-diversified portfolio to include large cap bank stocks.

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