East West Bancorp (EWBC) has been posting positive metrics despite a low interest rate environment and a sluggish economic recovery in the U.S. This California bank’s exposure to the the West Coast and the Chinese market have driven above-average performance, says Aaron James Deer, Managing Director and Equity Research Analyst at Sandler O’Neill + Partners, L.P.
“East West Bancorp is one that I like. It has been putting up very good loan growth, and I think that it has a very strong franchise that benefits from a position of supporting businesses that operate here in the U.S. and have a tie with China, and so it does a lot of international trade and finance lending,” Deer said.
East West Bank trades at a discount despite positive metrics, Deer says, and he says the bank should also benefit from a shift in the trade direction between the U.S. and China. The bank serves as a full-service commercial bank serving businesses and customers in both sides of the Pacific.
“As you see more trade between the U.S. and China, not just the U.S. importing but also the U.S. exporting to China, that should continue to benefit East West. Additionally, it has above average profitability with a double-digit ROE, but despite the good growth and above average profitability, its stock actually trades at a discount to the group,” Deer said.
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