O'Leary Doesn't Like Regional Banks

Investor and "Shark Tank" judge Kevin O'Leary was a guest on CNBC to talk about regional banks.

O'Leary, speaking from Montreal, Canada, where he is currently exploring a bid to enter the race for the leadership of the Conservative Party of Canada, offered his take on regional banks.

According to O'Leary, now that President-elect Donald Trump's governance is set to officially start, reality is set to kick in for the regional banks. Specifically, it's now clear it will take a long time before any new regulation is passed through that will benefit regional banks earnings.

"Here is the bottom line," O'Leary added. "Regionals have really ugly balance sheets. They have horrible capital requirements still there because of regulation. There is nobody out there increasing their earnings estimates for 2017 and we had a lot of optimism."

O'Leary said he "doesn't have a problem" with the financial sector as a whole and investors should want to own a "Goldman Sachs Group Inc GS balance sheet, not some crappy little regional bank which doesn't have any relief yet."

O'Leary also noted that he's short regional banks, but hasn't made a profit on the trade yet until Thursday as the SPDR KBW Regional Banking (ETF) KRE fell more than 2 percent.