Seeking Alpha: HSBC Has A Lot Of Work Left To Do

I had pretty equivocal feelings about HSBC (NYSE:HSBC) a year ago, and the stock's 10% decline since then fits that outlook. HSBC has done quite a bit better than other Euro banks like Societe Generale (OTCPK:SCGLY) and Santander (NYSE:SAN), but really doesn't hold up well compared to the performances of JPMorgan (NYSE:JPM) or DBS Group (OTCPK:DBSDY) - banks that I believe are superior models of what HSBC aspires to be in some respects.

As is, I'm still not sold on HSBC as a great investment today. Even if management can control costs and improve operations and lift the bank's ROE above 11% in 2019, I don't see a compelling value. On the other hand, if management is willing to be bolder and adopt a "be great or be gone" philosophy, the potential of a smaller, leaner, and better HSBC could be considerably more compelling.

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HSBC Has A Lot Of Work Left To Do

Seeking Alpha: BBVA's Improving Performance No Longer Fully Reflected In The Price

Large European banks like BBVA (NYSE:BBVA), and large banks in general, have an interesting dilemma these days. There are definite benefits of scale in banking and almost equally definite benefits from the diversification that comes from operating across multiple geographies, but regulators are increasingly looking to make the biggest banks pay a price for their size and importance in the form of higher capital ratios (which depress earnings and returns over time). With that, I believe large multinationals like BBVA, Santander (NYSE:SAN), Societe Generale (OTCPK:SCGLY), and UniCredit (OTCPK:UNCFF) have to be increasingly on top of the risks and benefits of their various operations and more willing to pull the weeds to let the flowers have more space.

A year ago I wasn't very keen about the valuation on BBVA's ADRs, and the shares have dropped about 25% since then (the local shares are down about 7%). That said, I did like BBVA quite a bit better than Santander, and the latter has been even weaker (down about a third over the same period). With that valuation reset, I'm definitely more favorably inclined toward BBVA but I wouldn't say that the value makes it a can't-miss prospect.

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BBVA's Improving Performance No Longer Fully Reflected In The Price

Seeking Alpha: There's More Than Scarcity Value To Santander Mexico

Retail investors don't have a lot of options when it comes to trying to benefit from the growth in the Mexican banking industry. Of the five largest banks in Mexico, only Grupo Financiero Santander Mexico (BSMX), or Santander Mexico for short, trades independently in the U.S. It isn't just scarcity that makes Santander Mexico stand out, though, as the company is also one of the leaders in consumer and commercial lending in Mexico, as well as one of the best-run banks in the market.

In addition to quality, Santander Mexico shares offer pretty solid value at today's price. While the stock is near the high end of its P/E ratio, it's not unreasonable relative to growth. Likewise, the company's return on tangible assets suggests that the stock should sport a much higher price/tangible book ratio, while a return on equity model indicates worthwhile upside in the shares today as well.

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There's More Than Scarcity Value To Santander Mexico