East West Bancorp Not Getting Much Appreciation For Above-Average Margins And Growth Potential

With all that has happened in the wake of the COVID-19 pandemic, including a pledge from the Fed to keep rates very low into 2023, it's not so surprising that banks have underperformed. So, in that context, East West Bancorp's (EWBC) in-line-with-peers 30%-plus year-to-date plunge is perhaps likewise not so surprising. Although there are a lot of positives to this name, including its cross-border lending capabilities and strong profitability, the reality is that East West cannot escape the pressures of weaker spreads, limited loan growth, and rising credit costs.

There are a lot of banks that look undervalued today, so investors are spoiled for choice. East West doesn't skew as among the cheapest, but I think there's an argument for it as a more compelling idea on the basis of its elevated quality. With that, I believe this is still a name worth considering.

 

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East West Bancorp Not Getting Much Appreciation For Above-Average Margins And Growth Potential