UBS Upgrades U.S. Banks

UBS upgraded U.S. banks from Neutral to Overweight Monday based on positive GDP forecasts and increasing demand for credit.

Morgan Stanley MS, Citigroup Inc C and Bank of America Corp BAC were the firm’s top picks.

The firm noted that the sector’s focus is on improving efficiency as credit scores rise while the chance for adverse regulatory surprises diminish.

The sector is also well positioned to deploy capital according to UBS.

Shares of the three banks fell Monday with Bank of America Corp declining to $16.75 by mid-day, down 1.68 percent.

Meanwhile, Morgan Stanley traded at $34.85, down 0.95 percent and Citigroup Inc traded at $53.09, down 1.63 percent.