Most US bank stocks are up by double digit percentage points so far this year. The benchmark KBW Bank Index for example has soared by about 34% YTD. With economic recovery forecast to accelerate this year, investors are betting banks stand to gain the most from the upsurge in economic activity.
Many of the foreign banks are also performing very well this year. For instance, the majority of European lenders are in the positive. However some of the foreign banks are in the red as shown in the table below:
| S.No. | Bank Name | Ticker | Stock Price (as of Mar 25, 2021) | Year-to-date Change(%) | Country |
|---|---|---|---|---|---|
| 1 | Banco BBVA Argentina S.A. | BBAR | $2.95 | -8.10% | Argentina |
| 2 | Banco Bradesco | BBD | $4.77 | -9.32% | Brazil |
| 3 | Banco de Chile | BCH | $18.70 | -8.24% | Chile |
| 4 | Banco Macro | BMA | $14.58 | -6.36% | Argentina |
| 5 | Banco Santander Brasil | BSBR | $7.59 | -12.15% | Brazil |
| 6 | Bancolombia | CIB | $29.16 | -27.43% | Colombia |
| 7 | Credit Suisse | CS | $10.78 | -15.78% | Switzerland |
| 8 | Grupo Financiero Galicia | GGAL | $8.10 | -7.32% | Argentina |
| 9 | Itau Corpbanca | ITCB | $4.36 | -11.92% | Chile |
| 10 | Itau Unibanco | ITUB | $5.37 | -11.82% | Brazil |
Source: BNY Mellon
Political issues in Chile and Colombia have hit the equity markets in those countries hard. Chileans strongly rejected conservatives led by President Sebastian and favored a leftist progressive coalition that plans to erase the neo-liberal economic policies first put forth by the late military dictator Augusto Pinochet. The ongoing protests against the government of Iván Duque has led to credit downgrades and has also adversely impacted equities.
Except Credit Suisse(CS), all the stocks listed above are from Latin America. Long-term investors with the ability to withstand strong volatility can consider some of these stocks at current levels. Banks from Argentina such as Banco Macro(BMA) can be avoided.
Disclosure: Long NCH, BBD, ITUB and ITCB
