The equity markets in the have recovered strongly so far this year. The S&P 500 is up about 10% YTD. But not all sectors are performing well. For instance, tech stocks have had a great run but the banking sector is having one of the worst years since the Global Financial Crisis (GFC) of 2008-2009. Among the banks, the regionals have been hit pretty hard with the KBW Nasdaq Regional Banking Index plunging by about 28% YTD. The regional bank ETF SPDR S&P Regional Banking ETF (KRE) for example is down even more with a decline of 33%. This ETF tries to track the return of the S&P® Regional Banks Select Industry Index.
Many of the individual banks are down deep in the red. Below are the YTD returns of a few banks:
- US Bancorp (USB): -32.55%
- Fifth Third Bancorp (FITB): -23.10%
- Glacier Bancorp, Inc (GBCI): -42.0%
- Huntington Bancshares Incorporated (HBAN): -28.0%
- KeyCorp (KEY): -44.0%
Have foreign stocks performed better or held up relatively well compared to the poor performance of US bank stocks?
The following table provides the answer. It shows the year-to-return of foreign banks trading on the US exchanges:
Some observations:
- The best performing foreign bank YTS is HSBC (HSBC) and the worst performer is Credit Suisse (CS). With the acquisition by UBS, eventually CS will disappear.
- The second worst foreign bank stock YTD is Bancolombia (CIB) of Colombia. At current prices the annual dividend yield is a juicy 10.44%.
- Due to its high exposure to the US markets, TD is the only Canadian bank that is in the negative territory.
- Bank of N.T. Butterfield & Son Limited (NTB) of Bermuda is not well known among investors and may be worth a look.
- ING Group N.V. (ING) is a long way from its previous peak but has stabilized and continuing earnings improvements and buybacks should help drive the price higher in the future.
Note: The returns noted above are excluding dividends
Source: BNY Mellon & Google Finance
Disclosure: Long BCH, CIB, GBCI, ING, ITCL, ITUB, BBD, BBVA, SAN, BNS, BMO, RY, CM and TD
