Banco Macro SA (ADR) (BMA), BBVA Banco Frances S.A. (ADR) (BFR): Banking in Buenos Aires? Buyer Beware

Is there any hope?

The Argentine banking sector is facing a lot of challenges due to government policy and uncertainty over economic conditions. While there is not a lot of confidence that things will improve, there have been some gains recently — if you bought stock at the right time. The year-to-date figures are pretty grim, with Banco Macro SA (ADR) (NYSE:BMA) down 13.45%, BBVA Banco Frances S.A. (ADR) (NYSE:BFR) down 14.71% and Grupo Financiero Galicia S.A. (ADR) (NASDAQ:GGAL) down 17.37%. However, the performance over the last six months is better: Banco Macro SA (ADR) (NYSE:BMA) is up 13.85%, BBVA Banco Frances S.A. (ADR) (NYSE:BFR) is up 14.4% and Grupo Financiero Galicia S.A. (ADR) (NASDAQ:GGAL) is up 13.49%. The Argentine banking sector tends to be more volatile than other national sectors.

Looking at Argentine companies in other sectors, financial stocks are more volatile than average. Recently re-nationalized YPF is down only 1.79% year-to-date and up 33.05% in the last six months. Telecom provider Telecom Argentina S.A. (ADR) (NYSE:TEO) is actually up 43.76% year-to-date and 61.5% in the last six months. What does this all mean? Not all Argentine stocks are performing poorly, but in general Argentine banks have been under-performing other sectors of the economy.


The Argentine banking sector will continue to be volatile and under-perform for the foreseeable future. With inconsistent economic policy from the Argentine government, it is likely that businesses will be too spooked to invest. This will continue to hit the Argentinian banking sector very hard. While it may be possible to make short-term profits on Argentine financial stocks, in general the stocks will be trending downwards. If you are interested in hunting for bargains in Argentine financial stocks, buyer beware!

The article Banking in Buenos Aires? Buyer Beware originally appeared on and is written by Jeremy Worthington.

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