Overseas bank stocks soared last year. How can investors break through the "product shortage"?

21st Century Business Herald Reporter Huang Zixiao Shenzhen Report

Recently, major international financial giants have been releasing their financial reports intensively. Represented by the four largest U.S. banks and three major card organizations, these giants delivered relatively good performance overall in 2025, with their stock prices performing notably during the same period.

In 2025, the U.S. banking sector performed strongly. Citigroup, JPMorgan Chase, Wells Fargo, and Bank of America saw their stock prices increase by 70.38%, 37.27%, 35.57%, and 28.04% respectively, even surpassing the performance of many U.S. tech giants during the same period.

European banks performed even more impressively, with Santander Bank, Spain’s foreign bank, and Deutsche Bank all doubling their stock prices during the same period.

The reporter notes that currently, the mainland market lacks products primarily investing in overseas banks, and public funds related to this are nearly nonexistent, which is starkly different from the rich product offerings in global technology investments. However, some related products are available among funds registered on the Hong Kong Stock Exchange, mostly launched by international asset management institutions.

Major International Banks Intensively Disclose Financial Reports

The four major U.S. banks generally refer to Citigroup, JPMorgan Chase, Wells Fargo, and Bank of America.

Recently, JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo successively disclosed their Q4 and full-year 2025 results. The annual revenues of these four banks were $182.4 billion, $182.4 billion, $85.2 billion, and $83.7 billion respectively, with year-over-year growth of 2.6%, 6.8%, 5.6%, and 1.7%. In terms of net profit, they achieved $57 billion, $30.5 billion, $14.3 billion, and $21.3 billion, with YoY changes of -2.4%, +13.1%, +12.8%, and +8.2%.

Including Goldman Sachs and Morgan Stanley, they are collectively known as the six largest U.S. banks. The latter two saw their 2025 revenues grow by 9% and 14%, and their net profits increase by 21% and 25.9% respectively.

The strong performance was reflected in their stock prices last year. Data shows that in 2025, Citigroup, Goldman Sachs, Morgan Stanley, JPMorgan Chase, Wells Fargo, and Bank of America gained 70.38%, 56.64%, 45.16%, 37.27%, 35.57%, and 28.04% respectively.

Overall, the U.S. banking industry is highly concentrated, with the top 14 banks accounting for more than half of the industry’s scale.

Regarding the financial reports of the four major U.S. banks, opinions among institutional analysts vary.

CICC (601995) recently stated in a research report, “We are covering the four largest U.S. banks for the first time.” CICC pointed out that these banks have demonstrated resilience during this rate-cutting cycle. Regarding net interest income, there is no need for excessive concern about rate-cut pressures in the short term; under diversified operations and multiple layouts, non-interest income accounts for an average of over 40% of total revenue, and it is expected to remain at a relatively high level; asset quality remains relatively stable, but marginal changes should still be monitored.

On valuation levels, CICC analysis states that the average P/B valuation of the four major U.S. banks has reached a new high since 2008, reflecting relatively stable macroeconomic expectations, a loosening cycle in financial regulation at the meso level, and continuous improvement in bank profitability at the micro level. Future focus should be on marginal changes before and after the mid-term elections.

Guoxin Securities recently commented that U.S. major banks maintain good performance growth supported by credit expansion and resilient net interest margins. However, deteriorating asset quality and increased provisioning pressure pose major future concerns, especially given the rapid growth in technology sector and credit card lending, which warrants vigilance regarding the marginal changes in tech prosperity and residents’ debt repayment capacity. JPMorgan Chase’s slight decline in net profit was mainly due to a $2.2 billion provision in Q4 for its Goldman Sachs Apple credit card business.

Expanding the view to the global financial sector, Visa, American Express, and Mastercard achieved stock price increases of 10.97%, 24.65%, and 8.41% respectively in 2025; however, asset management giants BlackRock (6.3%), Blackstone Group (-7.64%), KKR (-13.6%), and Carlyle Group (-21%) showed relatively flat performance during the same period.

Hong Kong Market Becomes an Important Channel for Global Layouts

Whether European or U.S. major banks, most choose to list on the New York Stock Exchange.

The reporter notes that currently, mainland financial institutions have limited exposure to overseas banking giants, seemingly missing out on this round of market opportunities. Related holdings are only visible in a few passive funds and some active funds.

Data shows that among the top ten holdings of the Penghua Dow Jones Industrial Average ETF, Goldman Sachs and American Express rank first and fourth; in two MSCI U.S. 50 ETFs by E Fund and Harvest Fund, JPMorgan Chase is among the top ten holdings. However, all three are passive funds traded on the exchange.

Nevertheless, Citigroup entered the top ten holdings of Huaxia Overseas Ju Xiang Fund in Q4 2025, currently ranking seventh, with a range fluctuation of 15.65%.

Several mainland industry insiders told the reporter that currently, there are no public funds dedicated specifically to investing in overseas banks.

In contrast, the Hong Kong market is more internationalized and has some fund products focused on global banking.

On February 10, the 21st Century Business Herald reporter checked the HKEX fund data and found several funds investing in global banks, including Fidelity Global Financial Services Fund, BlackRock World Financial Fund, and Manulife U.S. Banking Stock Independent Asset Portfolio, all structured as umbrella funds.

Fidelity Global Financial Services Fund (AGA006), with a size of $1.76 billion at the end of 2025, saw a 22.2% increase in USD terms during 2025. According to the product prospectus, at least 70% of assets are invested in stocks of global financial service companies, with top holdings including JPMorgan Chase, Berkshire Hathaway, VISA, Wells Fargo, DBS, and Mizuho. The fund is directly managed by Fidelity Investment in Luxembourg.

BlackRock World Financial Fund (AHF813), with a size of $2.8 billion at the end of 2025, holds top positions in Bank of America, Citigroup, Charles Schwab, UBS, Barclays, BNP Paribas, and Deutsche Bank. As of January 30, nearly 50% of its assets are invested in the U.S., 8.3% in the UK, and about 5% each in Austria, France, and Switzerland. Covering stronger European banks, the fund’s 2025 return reached 43.91%. HSBC and Standard Chartered are its distributors.

Manulife U.S. Banking Stock Independent Asset Portfolio (BJW915), mainly invests in U.S. bank stocks and related investments (such as ADRs and ETFs), with a size of $11.45 million at the end of 2025, of which 88.12% is in regional U.S. banks and 12.46% in diversified banks. Its 2025 return is 9.4%. The fund is managed by Manulife Investment Management (Hong Kong), which has a subsidiary, Manulife Fund Management Limited, in mainland China. Manulife Financial Group is headquartered in Canada, with an AUM exceeding $1.1 trillion.

On February 10, a distribution manager from a Hong Kong asset management firm told the 21st Century Business Herald that there are several funds in Hong Kong mainly investing in listed global banks, but currently no ETFs (exchange-traded funds).

Therefore, mainland investors wishing to capture opportunities in the global banking sector generally need to open relevant accounts in Hong Kong. However, with the continuous improvement of mechanisms like mutual recognition of funds and cross-border Wealth Management Connect, direct investment in related targets within mainland China may not be impossible in the future.