On August 23rd, the British-banking giant HSBC Holdings (HBC) bid for Nedbank (NDBKY.PK), South Africa’s fourth largest bank. HSBC is trying to buy the majority stake held in Nedbank by Anglo-South African insurer Old Mutual (ODMTY.PK). The deal potentially valued at $6.8B would give HSBC a 70% stake in Nedbank and offer the bank a strong presence in Africa’s largest economy.
With talks of a double-dip recession in the US economy and many Western banks still suffering from effects of the financial crisis, investors looking to gain exposure to international banks may consider the following emerging market bank stocks that are traded on the OTC markets in the US. Please note that these stocks are sponsored ADRs and have very light daily trading volumes.
1. Akbank (AKBTY.PK) is Turkey’s most valuable bank based on market capitalization with 877 branches and assets of over $69B at the end of 2009. The capital adequacy ratio stood at 21% at the end of last year and Euromoney magazine selected Akbank as the “Best Bank in Turkey”. The current dividend yield of the ADR is 1.49% and the stock is up over 10% YTD.
2. Commercial International Bank (CMGGF.PK) is the largest private sector bank in Egpyt based on loans. Last year the bank was ranked the best bank in Egypt by Euromoney, Global Finance and The Banker magazines. CIBEY is up over 29% YTD and the current yield is 2.02%.
3. Nedbank (NDBKY.PK) is one of the largest banks in South Africa. The bank has the second largest deposit base from retail customers. The stock pays a dividend of 3.03% and the price has grown by about 13% YTD.
4.Turkiye Garanti Bankasi (TKGBF.PK) is Turkey’s second largest private bank with an asset base of $78B at the end of 2009. Garanti has about 9 million customers and 792 branches. The current dividend yield on the ADR is 1.01% and the stock is trading under $5.
5. Czech-republic based Komercni Banka (KMBNY.PK) is part of France’s Societe Generale (SCGLY.PK) group. Komercni has operations in Central and Eastern Europe as well. Societe Generale holds 60.35% of the bank. Komercni has 1.62 million customers and 398 branches. As of second quarter this year, the capital adequacy ratio stood at 14.7% and Tier 1 capital ratio was 13.5%. The ADR pays a 4.38% dividend.