CLSA's Mike Mayo starts US banks with underperform

NEW YORK, April 6 (Reuters) - Veteran banking analyst Mike Mayo on Monday initiated the U.S. banking sector with an "underperform" rating, saying the sector's problems still have further to run while government action may not help as much as expected.

Mayo, who recently transfered to to CLSA's U.S. Broker-Dealer affiliate Calyon Securities (USA), highlighted the "seven deadly sins of banking," which led to excessive risk taking in the sector.

"The seven deadly sins of banking include greedy loan growth, gluttony of real estate, lust for high yields, sloth-like risk management, pride of low capital, envy of exotic fees, and anger of regulators," the report said.

Mayo argued that the effect was to front-load earnings but with further costs down the line, which are now being felt in the current crisis. The analysts say many of current problems in the sector are only "midstream" and still have further to go.

Below is a list of banks rated in the report:

* Bank of America (BAC.N) started with underperform rating

* Citigroup Inc (C.N) started with underperform rating

* JPMorgan Chase (JPM.N) started with underperform rating

* Comerica Inc (CMA.N) started with underperform rating

* Wells Fargo & Co (WFC.N) started with underperform rating

* BB&T Corp (BBT.N) started with sell rating*

* Fifth Third Bancorp (FITB.O) started with sell rating

* KeyCorp (KEY.N) with sell rating

* SunTrust Banks Inc (STI.N) with sell rating

* U.S Bancorp (USB.N) started with sell rating