Banks on Life Support

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The coming tidal wave of consumers falling behind on their credit cards and other debt will keep banks in sorry shape for the next year or more, Oppenheimer analyst Meredith Whitney told CNBC Wednesday.

“The big banks are going to be on life support for at least 18 months, if not 36 months,” she said. “The big banks will not fail, but the big banks will not grow, in my opinion, for at least another two years.”

Her remarks underscore recent comments by the nation’s top bankers. Bank of America CEO Ken Lewis says he anticipates the credit card industry will experience record losses. Lewis’ predecessor Hugh McColl recently told the San Francisco Business Times that it will take time for the economy to work its way through unwinding the credit bubble. And when he says time, he’s talking years, not months.

“Individuals are over-leveraged,” he said, adding that he’s speaking as an industry observer and not on behalf of BofA (NYSE: BAC).

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