Among the foreign bank ADRs, emerging market banks have performed very well so far this year relative to their developed world peers. This is not surprising since most emerging markets are up by double digit percentage points this year and financials are the main drivers of growth in these markets. As the pillars of the local economy banks tend to perform well when the overall economy in in expansion mode.

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

Note: The above returns are only price returns (excluding dividends)

Source: BNY Mellon

A few observations:

• Brazilian lender Banco Bradesco(BBD) has more than doubled. But it has only doubled from single digit prices. The other two Brazil banks noted above have soared also.
• With oil rices rising and peace returning to the country, Colombia’s BanColombia has increased by over 57%.
• British and other developed European lenders are still struggling to recover from years of poor returns.For example, Royal Bank of Scotland(RBS) is down about 40% and continues to let down investors for years in a row.

Disclosure: Long CIB, BBD, ITUB, SAN, BBVA, BSAC, BCH