Forget moving to just a market weighting in bank stocks. Investors should be underweighted in the group next year, said Stephen Berman, an analyst with Natwest Securities in New York.

Mr. Berman turned bearish on the group back in February, one of the early birds. Like some other analysts, he worried about eroding profit margins and spotty loan demand. But more than most others, he believed there was potential for disappointing earnings.

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