Foreign Bank Stocks: Irish, British Lead a Sea of Red

On Friday Feb 20th, US banks Bank of America (BAC) and Citigroup (C) fell heavily on huge volume due to nationalization fears. Bank of America fell to $2.53 before ending the day at $3.79 after the White House reassured investors that nationalization was not in the cards. Similarly Citibank closed at $1.95. BAC is down 73.08% so far this year and Citibank is off nearly 71%.

While bank shares in the US are getting decimated, foreign banks are not immune either. In fact some of the global bank stocks have performed equally poorly or even worse than US banks.

The following table shows the Year-To-Date (YTD) performance of global bank ADRs listed on the US organized exchanges:

Bank Name	Ticker	Last Price	YTD %Change	Country
Corpbanca	BCA	$21.00	5.00%	Chile
Banco de Chile	BCH	$34.25	4.64%	Chile
Banco Santander Chile	SAN	$34.70	-0.94%	Chile
Banco Macro	BMA	$9.92	-8.32%	Argentina
Banco Bradesco	BBD	$8.59	-12.97%	Brazil
Westpac Banking	WBK	$51.54	-14.46%	Australia
Credit Suisse	CS	$24.02	-15.00%	Switzerland
Unibanco	UBB	$54.68	-15.38%	Brazil
Banco Itau	ITU	$9.55	-17.67%	Brazil
Woori Finance	WF	$11.70	-18.01%	Korea
Grupo Financiero Galicia	GGAL	$1.80	-20.35%	Argentina
HDFC Bank	HDB	$54.27	-23.97%	India
BBVA Banco Frances	BFR	$2.23	-25.67%	Argentina
Mitsubishi UFJ Financial	MTU	$4.56	-26.57%	Japan
ICICI Bank	IBN	$13.78	-28.42%	India
HSBC	HBC	$34.47	-29.18%	United Kingdom
Bancolombia	CIB	$16.50	-29.34%	Colombia
KB Financial	KB	$18.07	-31.03%	Korea
National Bank of Greece	NBG	$2.62	-31.23%	Greece
UBS	UBS	$9.71	-32.10%	Switzerland
Mizuho Financial	MFG	$3.87	-32.93%	Japan
Banco Santander S.A	STD	$6.28	-33.83%	Spain
Shinhan Financial	SHG	$30.56	-35.20%	Korea
Deutsche Bank	DB	$24.23	-40.45%	Germany
Banco Bilbao Vizcaya Argentaria	BBV	$7.43	-40.51%	Spain
Barclays Bank	BCS	$5.53	-43.57%	United Kingdom
Lloyds Banking Group	LYG	$3.25	-57.79%	United Kingdom
Royal Bank of Scotland	RBS	$5.54	-63.48%	United Kingdom
Bank of Ireland	IRE	$1.68	-64.78%	Ireland
Allied Irish Banks	AIB	$1.60	-65.88%	Ireland

Chart:

Note: All data as of Feb 20, 2008

As seen from the table and chart above, only two Chilean banks, Corpbanca (BCA) and Banco De Chile (BCH), are up this year. The Irish and British banks are the worst performing banks globally.

Today The Times reports that RBS will be split into good bank and bad bank as part of a radical restructuring plan. Last month Ireland nationalized the Anglo Irish Bank but ruled out the nationalization of the other two banks - Bank of Ireland (IRE) and Allied Irish Bank (AIB). Overall banks in the developed world have performed worse than the ones in the emerging markets year to date.

Comments

[rayman:]

I disagree completely with the negativity of this article. This article fails to mention that some banks are actually doing well, and it's taken completely from a chart basis with no fundamentals to support the facts. Actually BBD raised it's dividend. UBB actually did a stock SPLIT last year because their stock was so high and it's actually done not too bad for the year (*disclaimer, I don't own any of them now, but made some pretty good money from the *long* side whilst watching US banks plummet, or as they would say in Brazil *el tanko*).
As far as the comment: "In fact some of the global bank stocks have performed equally poorly or even worse than US banks."
Yes, you should say "some" and not present a complete list with high quality banks.

Unfortunately this article may have been written also right after the big Stanford Financial scenario.
If I were in an investor, I would start small positions, but, however, I think pullbacks in some of these banks present buying opportunities, especially some of the larger emerging market banks such as UBB & IBN.

Feb 23 02:44 AM

[Fliujniligui:]

Would need an article to review the Irish Banks. Bargains vs Nationalization traps ?

Feb 23 09:10 PM

[Ryan Vanzo:]

Definetley agree with Fliujniligui. If they survive they will be 10 baggers no problem.....but will they survive????


On Feb 23 09:10 PM Fliujniligui wrote:

> Would need an article to review the Irish Banks. Bargains vs Nationalization
> traps ?

Feb 25 10:42 AM