NEW YORK (TheStreet) - The last installment in this Trading Bank Earning series breaks down earnings results and investment opportunities among the eight largest global banks I follow that either have a large U.S. presence or are prominent enough to be publicly traded on a major U.S. stock exchange.
Unlike the other banks covered in this series, the global banks have their headquarters outside the United States and primarily based in Canada or Europe, with one based in Japan. Assets for these institutions cover a wide range from $500 billion to $2.7 trillion (converted to U.S. dollars).
(To evaluate how global compare, view the other articles in this series: Trading Bank Earnings Part 1, Trading Earnings, Part 2 and 'Non-Traditional' Strong Results: Trading Earnings, Part 3.)
Of the global banks that have reported (three do not report until August), three of the five, or 60%, beat analysts' expectations. This is the second-worst rate among money center banks (50%), super regionals" (75%) and the non-traditional financial service companies (67%).
So, as an investor, how can you make money?
Revised stock price appreciation for the global bank group from April 10 to May 16 yielded an industry leading best increase of 0.9% compared to money centers that had declines in return by 2.5%, regionals with a decline of 1.8% and non-tradtitional banks with an increase in return of 0.4%. The trend, after earnings season, for the all U.S. banking sectors has been to sell off.
At the three-week mark after earnings, money centers actually were up by 0.4%, with the regional group up 0.5% and the financial service companies' stock price appreciation of 1.6% over three weeks ending May 2. The table below indicates key metrics and highlights which banks met or beat earnings and those that missed and by how much.
The global banks that beat first-quarter 2014 expectations were: Toronto Dominion (TD), beat by 2.9%; HSBC Financial (HSBC) by 0.7% and Bank of Montreal (BMO), beat by 4.5%. Two banks in the group missed recent estimates: Deutsche Bank (DB) missed by 23.4% and Royal Bank of Scotland (RBS) missed by 46.5%.