1 Reason to Watch Out for These Banks

The following video is part of our "Motley Fool Conversations" series, in which senior analyst Anand Chokkavelu, CFA, discusses topics around the investing world.

Here's a scary number: 8.7%. What is it? It's bad loan percentage for Spanish banks per the Bank of Spain (as of April).

To put that in perspective, Synovus, a U.S. bank I've warned against for its poor lending standards never hit that mark during the financial crisis. Looking at current numbers, Synovus stands at 4.3%. Going to larger U.S. banks with histories of bad lending standards, Citigroup is at 1.8% and Bank of America 3.0%.

Looking at individual big Spanish banks, the bad debt picture is better than 8.7%, but still scary: BBVA is at 4.4% and Banco Santader is at 4.3%.

Check out the following video for Anand's thoughts.

With so many of the big finance firms getting bad press these days, you may be inclined to stay away from the sector entirely, but that could be a mistake. In fact some of the best opportunities over the next few years can be found there, including one small, under-the-radar bank. It’s been called one of The Stocks Only the Smartest Investors Are Buying. You can learn about it, and more, in our exclusive free report. Just click here to keep reading

Anand Chokkavelu owns shares of Bank of America and Citigroup, long-dated options in Bank of America, and warrants in Citigroup. The Motley Fool owns shares of Bank of America and Citigroup. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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