Foreign banks trading on U.S. markets logged some of the healthiest gains among industry groups during Tuesday's rebound. Some 15 of 23 banks in the group climbed more than 4% Tuesday morning in a rebound triggered at least partly by China's central bank. The People's Bank of China trimmed its target interest rate by one quarter of one percent after stock markets closed in China Tuesday. The bank also reduced reserve requirements for China's banks. Both moves aimed to increase the supply of credit and capital within the economy.
It's not a big surprise that American depositary receipts of the relatively small National Bank of Greece (NYSE:NBG) led the group with a 7% gain. Shares remained depressed, however.
The much larger Westpac Banking (NYSE:WBK) trimmed its early gain to 6%. The Australia-based bank has a market capitalization of more than $69 billion, posted 2014 revenue of $34.8 billion and sports a 7% dividend. China is Australia's top trading partner, and an increase in liquidity bodes well for exports including iron ore and coal, as well as for the relative strength of Australia's dollar. Tuesday's gain left Westpac, which has been in a looping consolidation since hitting a high in May 2013, still trading near three-year lows.
Shares of the National Australia Bank (OTCPK:NABZY) also pared its early gain to 6%. The bank has U.S. market capitalization of $25.9 billion, 2014 revenue of $32.7 billion and a 7.4% dividend. The stock has also corrected since a May 2013 high and is near its low of October 2011.
Banks in South America, which also tend to be commodities-sensitive and have strong trade programs with China, knocked off some healthy gains.
Argentina's Banco Macro (NYSE:BMA) popped 7% at the open, ending with a 1% advance. The stock is still more than 30% below its March high. A recent Raymond James report showed Argentina's government owned 31% of the bank's shares traded on the Buenos Aires exchange. Grupo Financiero Galicia (NASDAQ:GGAL) rallied, then reversed to a fractional gain. Argentina's government reportedly owns 20% of the bank.
The leader in the foreign banking group, India's HDFC Bank (NYSE:HDB), pared an early jump to less than 1%. The move failed to retake support at the 200-day moving average, and left shares more than 10% below its July 20 high.
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