Fears of the U.S. regional banking sector facing a rerun of last year’s turmoil have surfaced after Moody’s downgraded New York Community Bancorp, Inc. (NYCB) credit rating to junk. Moreover, the Federal Reserve looks unlikely to start cutting rates from March, as policymakers signaled no rush to cut interest rates. This means interest rates will likely remain higher for a longer time.
Given this backdrop, it could be prudent to look beyond borders and invest in fundamentally strong foreign banking stocks Banco Santander, S.A. (SAN) and Akbank T.A.S. (AKBTY). However, not all foreign bank stocks are well-positioned to deliver market-beating returns. First Citizens BancShares, Inc.’s (FCNCA) weak fundamentals and growth prospects make it best avoided now.
