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 Name | Ticker | Ending Price on Sept 2, 2022 | Year-to-Date Change(%) | Country |
|---|---|---|---|---|---|
| 1 | Itau Unibanco | ITUB | $5.07 | 35.20% | Brazil |
| 2 | Banco de Chile | BCH | $20.13 | 28.13% | Chile |
| 3 | Itau Corpbanca | ITCB | $3.58 | 23.45% | Chile |
| 4 | ICICI Bank | IBN | $21.84 | 10.36% | India |
| 5 | Banco Bradesco | BBD | $3.68 | 7.60% | Brazil |
| 6 | Banco Santander Brasil | BSBR | $5.76 | 7.26% | Brazil |
| 7 | Banco Macro | BMA | $14.91 | 6.35% | Argentina |
| 8 | Banco Bradesco | BBDO | $3.00 | 3.45% | Brazil |
| 9 | Banco Santander Chile | BSAC | $16.74 | 2.76% | Chile |
| 10 | HSBC | HSBC | $30.59 | 1.46% | United Kingdom |
| 11 | Banco BBVA Argentina S.A. | BBAR | $3.15 | UNCH | Argentina |
| 12 | HDFC Bank | HDB | $61.98 | -4.75% | India |
| 13 | Mitsubishi UFJ Financial | MUFG | $5.08 | -6.96% | Japan |
| 14 | Grupo Financiero Galicia | GGAL | $8.54 | -10.01% | Argentina |
| 15 | Bancolombia - Pref | CIB | $28.23 | -10.64% | Colombia |
| 16 | Mizuho Financial | MFG | $2.27 | -10.98% | Japan |
| 17 | Sumitomo Mitsui Financial | SMFG | $6.02 | -11.34% | Japan |
| 18 | Shinhan Financial | SHG | $25.61 | -17.15% | Korea |
| 19 | Woori Financial Group Inc. | WF | $25.12 | -21.82% | Korea |
| 20 | Lloyds Banking Group | LYG | $1.96 | -23.14% | United Kingdom |
| 21 | KB Financial Group | KB | $35.21 | -23.72% | Korea |
| 22 | Banco Bilbao Vizcaya Argentaria | BBVA | $4.40 | -25.04% | Spain |
| 23 | Barclays Bank | BCS | $7.72 | -25.41% | United Kingdom |
| 24 | Banco Santander | SAN | $2.35 | -28.57% | Spain |
| 25 | Deutsche Bank | DB | $8.27 | -33.84% | Germany |
| 26 | Credit Suisse | CS | $5.12 | -46.89% | Switzerland |
| 27 | NatWest | NWG | $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
