Zacks Industry Outlook Highlights: ICICI Bank Limited, Banco Bradesco S.A., Banco Santander-Chile, Westpac Banking Corporation and HDFC Bank - Press Releases

For Immediate Release

Chicago, IL – November 17, 2010 – Today, Zacks Equity Research discusses the Steel Industry, including ICICI Bank Limited (IBN), Banco Bradesco S.A. (BBD), Banco Santander-Chile (SAN), Westpac Banking Corporation (WBK) and HDFC Bank Limited (HDB).

A synopsis of today's Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/43372/Non-U.S.+Banks+Stock+Update+-+Nov.+2010.

Although the upturn in the banking sector through the first half of 2011 will vary from country to country, depending on industry circumstances, we believe that banks in emerging economies - Chile, Brazil or India, for instance - may be more attractive investments, similar to what we expect for certain regional banks in the U.S.

The same, however, cannot be said of European institutions. Earlier this year, the debt crisis originating in the Greek economy threatened the stability of the European Union's (EU) monetary policies. Starting as a solvency crisis in a single country, the turmoil threatened the entire Euro zone. Though Greece adopted measures to minimize government spending and stress test results were largely reassuring, there is no guarantee that the country is out of the woods as affluent domestic and foreign investors will not stop withdrawing their money from Greek banks anytime soon.

The European Union is taking further action to restore the confidence of investors and the health of the European banking system, but the issue is far from fully addressed. This is evident from issues related to the Irish banking system and that government's refusal to ask from help from the IMF and/or the EU.

To be sure, banks in emerging economies will face asset quality issues. However, they are not plagued by other significant problems that many of the larger banks face in continental Europe and the United Kingdom, such as toxic securities, dilution from capital raising and dividend cuts/omissions. Moreover, these emerging-market banks generally tend to be well capitalized, aren't as heavily exposed to property markets, and have significant and generally growing sources of non-interest income.

The Institute of International Finance, which represents major financial institutions in 70 countries, said in a report recently that firms are learning from the crisis. Banks in emerging economies have performed remarkably well over the last few months to serve as a stabilizing force in global economic recovery.

In all, a key determinant for quick recovery will be the quality of risk analysis and how well risk-awareness is built into decision-making and incentive policies. So we believe that accumulating larger capital buffers over the cycle and reducing pointless complexity in business will be crucial for the performance of non-U.S. banks. Also, the primary attention of policymakers should be to determine how much longer the fiscal stimulus should continue, which should not be withdrawn before a clearer sign of economic recovery is visible.

OPPORTUNITIES

Currently, the only financial institution in the non-U.S. bank universe with a Zacks #1 Rank (Strong Buy) is IICICI Bank Limited (IBN). Banks that we like with a Zacks #2 Rank (Buy) include Banco Bradesco S.A. (BBD), Banco Santander-Chile (SAN) and Westpac Banking Corporation (WBK).

We also like HDFC Bank Limited (HDB) in India. It has recently been emphasizing strong cost controls and improved operating efficiency, rather than growth, as key strategies. As a result, it has been able to stave some of the earnings pressure off higher loss provisions due to a weakening asset quality.

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