Amazon's entry into the financial sector could come sooner rather than later. Bankers beware.
CFRA bank analyst Ken Leon in the US says the online giant may acquire a small or mid-size bank next year to gain a footing in the industry. That's just one of Leon's top predictions for the sector next year.
"This may either be a tactical move or a broad strategic jump into banking, as Amazon seeks more stickiness with consumers and small businesses in consumer lending such as auto loans, credit cards and home mortgages," he wrote.
Amazon has already ventured well beyond its internet roots, including establishing a physical footprint in the grocery business with its acquisition of Whole Foods Market this year. The company's shares have climbed nearly 60 per cent year-to-date.
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Leon's other top calls for the banks next year include investment banks deciding to combine their fixed income, commodities and currencies trading businesses, and earnings accelerating in the second half as the yield curve steepens and banks see higher net interest income. Of his 10 predictions for 2018, the potential move by Amazon ranks third on the list.