In this article, we will look at the 10 Worst Performing Bank Stocks in 2024.
Banking Sector Trends for 2025
On December 12, 2024, Goldman Sachs global investment research managing director & senior analyst Alex Blostein joined Yahoo Finance to discuss the top trends for the banking sector heading into 2025. Goldman Sachs had held financial conferences with banking executives before Alex Blostein appeared for this interview, thus his analysis of the sector brings in the perspective of industry experts.
Blostein noted that they have hosted more than 100 executives from the industry ranging from bankers to brokers and asset managers. The key takeaway from the perspective of all the experts points towards optimism around the economy and some data points support this optimism. He noted that the pent-up capital market activity seems to be translating to more actionable steps, therefore the capital markets and the merger and acquisition activity are likely to accelerate materially in 2025. Another theme that Blostein noted is that all sub-sectors around private markets are feeling healthy and the years of concentration around private credit have started to broaden into private equity. Blostein further mentioned that from his talks with banking executives, it seems that real estate has also started to get a little better than it was previously. He also emphasized that one of the key themes for the industry is the large amount of capital sitting at the sidelines. Blostein estimates there is around $7 trillion of capital sitting as money market fund, which has now started to make its way into the market, initially through fixed income, but may extend to equities. Therefore all of these themes advocate for a bullish financial sector in 2025.
While talking about what the positive change for the sector will look like, Blostein noted two areas that people keep under the spotlight the capital market and M&A. On the M&A front, the sector is running around 10% to 15% below cyclical averages. This means that the markets have gone up considerably, which presents an upside of 15% to 30% for M&A volumes over the next couple of years. On the other hand, the equity capital markets in 2024 were running around 30% to 40% below the 2021 peak levels. This topped with the pent-up demand from the clients puts the private market and equity firms to return some of the capital back through M&A and equity capital market routes. Therefore the overall economic condition plus the themes discussed above makes a bullish case for the financial and banking sector.
With that let’s take a look at the 10 worst performing bank stocks in 2024.
A banker closely examining a document while seated at his desk.
Our Methodology
To curate the list of 10 worst-performing bank stocks in 2024, we used the Finviz stock screener. Using the screener we aggregated a list of bank stocks both diversified and regional banks that have fallen by at least 15% over the past year. Next, we checked the performance of each stock and ranked the stocks in descending order of their 1-year performance. We have also added the number of hedge funds holding each stock sourced from Insider Monkey’s Q3 2024 database. Please note that the data was collected on February 11, 2025.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Worst Performing Bank Stocks in 2024
10. MainStreet Bancshares Inc. (NASDAQ:MNSB)
Price: $16.49
Number of Hedge Fund Holders: 6
1-Year Price Performance: -14.69%
MainStreet Bancshares Inc. (NASDAQ:MNSB) is the holding company that owns MainStreet Bank. This bank provides a variety of financial services to individuals, small and medium-sized businesses, and professionals. It provides banking services, loans, cash management, and digital banking services.
The bank faced a mixed year in 2024. It achieved significant core deposit growth, adding $187 million in core deposits throughout 2024. On the other hand, a complete write-down of intangible assets negatively impacted financial performance, reducing earnings per share significantly. As a result, it reported a loss of $1.60 per share for fiscal year 2024 due to negative returns on average assets and equity. On the bright side, MainStreet Bancshares Inc. (NASDAQ:MNSB) has been focusing on reducing non-performing assets, during the year it reduced non-performing assets by 62%, bringing the balance down to $21.7 million. Looking ahead, the bank aims for low-single-digit loan growth while focusing on reducing non-performing assets and funding costs further. It is one of the worst-performing bank stocks in 2024.
9. Banco Santander (Brasil) S.A. (NYSE:BSBR)
Price: $4.59
Number of Hedge Fund Holders: 7
1-Year Price Performance: -20.73%
Banco Santander (Brasil) S.A. (NYSE:BSBR) is the subsidiary of the international bank Banco Santander. It is a major bank in Brazil with key services in Retail and Wholesale banking. While the bank acts as a comprehensive financial partner for both personal and business needs, it also provides additional services including asset management, securities brokerage, insurance brokerage, and pension plan services.
The bank has been focused on a customer-centric policy to become a primary bank for its clients in Brazil. However, the broader market conditions have proved to be significant headwinds for Banco Santander (Brasil) S.A. (NYSE:BSBR) as the stock has fallen more than 20% over the past 12 months. On February 11, Mario Pierry analyst at Bank of America Securities reiterated a Hold rating on the stock with a price target of $4.90. Pierry noted that the bank’s focus on secured credit products and high-credit-score clients can result in softer loan growth in the future as the strategy prioritizes quality over quantity. In addition, he also expects higher Selic rates, which are projected to increase further in 2025. This could negatively affect the net interest income by reducing the loan demand.
That being said, Banco Santander (Brasil) S.A. (NYSE:BSBR) showed some growth during the fiscal fourth quarter of 2024. The bank expanded its loan portfolio by 6.2% year-over-year and reduced the recurring cost of risk by 0.5 percentage points thereby leading its Net Interest Income higher by 16% during the same time. Although the stock was held by 7 hedge funds in Q3 2024, it still ranks as the 9th worst-performing bank stock in 2024.
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