On The Performance of Foreign Foreign Bank Stocks Year-to-Date

Most of the exchange-listed foreign banks trading on the US exchanges are down so far this year in line with the overall market conditions in the equity markets. As expected, European banks are in the deep red while emerging market banks especially in Latin America have performed very well. European lender Credit Suisse(CS) is the worst performer with a loss of nearly 47%. Brazilian banks are some of the top performers with Itau Unibanco(ITUB) gaining over 35% year-to-date. In general, Brazilian equities are on the upswing with investors expecting major changes after the general elections in October this year. The last time the equity market had a great bull run was when Lula was President.

The following table shows the year-to-date returns of foreign bank stocks:

S.No.Bank NameTickerEnding Price on Sept 2, 2022Year-to-Date Change(%)Country
1Itau UnibancoITUB$5.0735.20%Brazil
2Banco de ChileBCH$20.1328.13%Chile
3Itau CorpbancaITCB$3.5823.45%Chile
4ICICI BankIBN$21.8410.36%India
5Banco BradescoBBD$3.687.60%Brazil
6Banco Santander BrasilBSBR$5.767.26%Brazil
7Banco MacroBMA$14.916.35%Argentina
8Banco BradescoBBDO$3.003.45%Brazil
9Banco Santander ChileBSAC$16.742.76%Chile
10HSBCHSBC$30.591.46%United Kingdom
11Banco BBVA Argentina S.A.BBAR$3.15UNCHArgentina
12HDFC BankHDB$61.98-4.75%India
13Mitsubishi UFJ FinancialMUFG$5.08-6.96%Japan
14Grupo Financiero GaliciaGGAL$8.54-10.01%Argentina
15Bancolombia - PrefCIB$28.23-10.64%Colombia
16Mizuho FinancialMFG$2.27-10.98%Japan
17Sumitomo Mitsui FinancialSMFG$6.02-11.34%Japan
18Shinhan FinancialSHG$25.61-17.15%Korea
19Woori Financial Group Inc.WF$25.12-21.82%Korea
20Lloyds Banking GroupLYG$1.96-23.14%United Kingdom
21KB Financial GroupKB$35.21-23.72%Korea
22Banco Bilbao Vizcaya ArgentariaBBVA$4.40-25.04%Spain
23Barclays BankBCS$7.72-25.41%United Kingdom
24Banco SantanderSAN$2.35-28.57%Spain
25Deutsche BankDB$8.27-33.84%Germany
26Credit SuisseCS$5.12-46.89%Switzerland
27NatWestNWG$5.78-13.34%United Kingdom

Note: The returns noted above are excluding dividends

Source: BNY Mellon

Investors can avoid European banks since they face major headwinds both due to internal issues and external issues such as the Ukraine war for example. Emerging market banks offer better opportunities than European banks. For instance, Colombian or Chilean or Indian banks have better growth potential than British banks which are mired in problems ranging from the most recent Brexit drama and potential recession in the country.

Disclosure: Long BCH, CIB, ITUB, BBD, BBVA, SAN and LYG

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