Bank analyst David Hendler, known for his contrarian views on the industry, has left the research firm CreditSights and plans to start a risk-management consultancy.
Hendler had been CreditSights' head of U.S. financial services, directing its coverage of financial companies. Neither he nor the company would comment on the reason for his departure, which was effective Oct. 25.
CreditSights promoted Pri De Sliva to lead its coverage of U.S. banks and brokerages. He joined CreditSights from SNL Financial in 2006, company spokesman Peter Petas said.
Hendler, 52, joined CreditSights in 2001 as its twelfth employee, just eight months after the startup was formed. He was instrumental in building the company's financial-services group, which now has 19 analysts, including seven focused on U.S. companies.
Hendler is best known for taking sharply critical views of financial heavyweights including Countrywide, Washington Mutual and Goldman Sachs (GS) during the mid-2000s. At the height of the housing boom, his analysis focused on the risks of the mortgage-backed securities that banks were adding to their balance sheets.
"The banks said, 'We're making so much money, how can you criticize us?'" Hendler said. "I called it 'New Age finance'-- they were generating a lot of profit, but there was a lot of risk that the market wasn't pricing."
Hendler plans to continue focusing on risk management in the financial services in his consultancy, which he says will begin operating sometime next year. The new firm will provide analysis largely for institutional investors, risk managers and regulators, he said.
Separately, CreditSights' U.S. group is interviewing analysts with expertise in regulatory and legislative risk in the banking sector, and plans to focus on these issues over the next year, Petas said. In a report published Monday, the group maintained its "perform" rating for the banking industry, while highlighting the legal challenges and regulations now going into effect.
Despite Hendler's reputation as a bank critic, he says that the contrarian call he's most proud of was going overweight on the big banks in 2009, when their stock prices were still depressed on fears of further bank failures.
"You invest when everybody is too negative, and that's what happened during the credit crisis," Hendler said. "When you're doing independent research you're not worried what conventional wisdom says."