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:
| S.No. | Bank Name | Ticker | Stock Proce as of May 19, 2023 close | Year-to-date Change (%) | Country |
|---|---|---|---|---|---|
| 1 | HSBC | HSBC | $38.25 | 22.98% | United Kingdom |
| 2 | Grupo Financiero Galicia | GGAL | $11.53 | 19.22% | Argentina |
| 3 | Banco Santander Chile | BSAC | $18.80 | 18.94% | Chile |
| 4 | Banco Bilbao Vizcaya Argentaria | BBVA | $7.04 | 16.81% | Spain |
| 5 | Banco Santander | SAN | $3.42 | 15.93% | Spain |
| 6 | Itau Unibanco | ITUB | $5.43 | 13.38% | Brazil |
| 7 | Banco Bradesco | BBD | $3.18 | 12.15% | Brazil |
| 8 | Banco Santander Brasil | BSBR | $6.04 | 11.32% | Brazil |
| 9 | Banco BBVA Argentina S.A. | BBAR | $4.30 | 10.51% | Argentina |
| 10 | Itau Corpbanca | ITCL | $3.51 | 7.67% | Chile |
| 11 | Banco Macro | BMA | $17.31 | 7.61% | Argentina |
| 12 | UBS Group AG | UBS | $20.09 | 5.96% | Switzerland |
| 13 | Lloyds Banking Group | LYG | $2.29 | 5.45% | United Kingdom |
| 14 | ICICI Bank | IBN | $23.07 | 5.03% | India |
| 15 | Banco de Chile | BCH | $21.84 | 4.27% | Chile |
| 16 | Grupo Supervielle S.A. | SUPV | $2.25 | 4.17% | Argentina |
| 17 | Bank Of Montreal | BMO | $87.36 | 4.04% | Canada |
| 18 | NatWest | NWG | $6.68 | 4.02% | United Kingdom |
| 19 | Mizuho Financial | MFG | $3.04 | 3.87% | Japan |
| 20 | ING Group N.V. | ING | $13.01 | 3.75% | The Netherlands |
| 21 | Bank Nova Scotia Halifax | BNS | $49.26 | 3.34% | Canada |
| 22 | Canadian Imperial Bank of Commerce | CM | $41.57 | 2.59% | Canada |
| 23 | Barclays Bank | BCS | $7.92 | 2.44% | United Kingdom |
| 24 | Sumitomo Mitsui Financial | SMFG | $8.33 | 1.12% | Japan |
| 25 | Royal Bank Of Canada | RY | $94.20 | 0.57% | Canada |
| 26 | Mitsubishi UFJ Financial | MUFG | $6.87 | -0.45% | Japan |
| 27 | Woori Financial Group Inc. | WF | $26.93 | -0.94% | Korea |
| 28 | HDFC Bank | HDB | $66.67 | -2.81% | India |
| 29 | KB Financial Group | KB | $37.14 | -3.54% | Korea |
| 30 | Credicorp Ltd. | BAP | $132.75 | -3.89% | Peru |
| 31 | Toronto Dominion Bank | TD | $60.92 | -5.04% | Canada |
| 32 | Shinhan Financial | SHG | $26.18 | -5.48% | Korea |
| 33 | Intercorp Financial Services Inc. | IFS | $21.98 | -6.27% | Peru |
| 34 | Deutsche Bank | DB | $10.58 | -7.99% | Germany |
| 35 | Grupo Aval Acciones y Valores S.A. | AVAL | $2.17 | -11.07% | Colombia |
| 36 | First BanCorp. | FBP | $11.35 | -11.74% | Puerto Rico |
| 37 | OFG Bancorp | OFG | $24.23 | -12.43% | Puerto Rico |
| 38 | Bank of N.T. Butterfield & Son Limited | NTB | $25.14 | -16.70% | Bermuda |
| 39 | Bancolombia | CIB | $23.80 | -16.85% | Colombia |
| 40 | Credit Suisse | CS | $0.87 | -70.72% | Switzerland |
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
