Key Points
- The outbreak of the Iran war caused a swift re-rating in some sectors, especially in Europe and Asia.
- UBS, Banco Santander, and Erste Group are three international banks recovering from war-driven drawdowns of 20% or more that are now approaching new 52-week highs.
- All three banks report Q1 2026 earnings on April 29, providing a near-term catalyst that could drive further price appreciation.
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Markets appear to be looking past the initial oil shock from the Iran war, and risk appetite has firmed even as crude remains volatile.
But while many companies on U.S. exchanges have already made new highs, international stocks suffered larger drawdowns and therefore have more ground to recover. Foreign bank stocks, especially those in Europe, were attractive investments in 2025, and many remained at the top of analysts’ recommendations lists for 2026. Now that geopolitical shocks are (hopefully) behind us, these stocks once again have a chance to lead, and the three companies we’ll mention today are quickly resuming their bullish marches.
Despite a very shaky ceasefire, these three international bank stocks are once again on an upward march toward new 52-week highs. The Iran war drove many of these stocks down 20% (or more), so investors today have a great chance to buy quality companies on sale despite no change to their long-term outlooks.
UBS Group: Pair of Upgrades and Easing Capital Requirements Provide Tailwinds Ahead of Q1 Earnings
After soaring nearly 40% in 2025, UBS Group AG (NYSE: UBS) was a top analyst pick to begin 2026. The integration of Credit Suisse was executed ahead of schedule, and the company now has a wealth management operation that rivals even the largest U.S. investment banks.
UBS started the year strong with its Q4 2025 results, delivered on Feb. 3, which included revenue growth of more than 10% year over year (YOY) and plans for another 3 billion Swiss Francs (CHF), or approx. $3.8 billion in share buybacks in 2026.
UBS slashed its annual dividend by nearly 40% this year, but its 14% Common Equity Tier One (CET1) ratio shows it remains well-capitalized.
A downgrade from Goldman Sachs, followed by the outbreak of the Iran war, led to a swift re-rating of UBS shares.
The stock dropped more than 20% before bottoming out at the end of March, but the Moving Average Convergence Divergence (MACD) indicator spotted the slowing downward momentum long before the price began to rebound.
As the MACD flipped bullish, UBS shares soared back above the 50-day and 200-day moving averages on heavy volume. The stock is once again testing the 50-day MA, but UBS received recent upgrades from Barclays and Weiss, good news from the Swiss government on its capital requirements, and has an upcoming earnings catalyst on April 29.
Banco Santander: Bold Management Plans Present Growth Opportunity
Banco Santander, S.A. (NYSE: SAN) was another big 2025 winner, more than doubling on the year as the European banking sector took off.
This rally continued into 2026 until the Iran war started, and SAN shares quickly dropped 20%. However, now that markets are shaking off the oil shock, investors have another chance to buy one of the most diversified European banks at 10 times forward earnings and 1.39 times book value.
Management has laid out an impressive framework for its 2028 goals, targeting Return On Tangible Equity (ROTE) over 20%, 20 billion euros (approx. $23.4 billion) in profits, and a doubling of the cash dividend.
Banco Santander has the lowest CET1 ratio among major Eurozone banks at 13.5%, but this remains well above the compliance level, giving the bank plenty of wiggle room to sustainably return capital to shareholders. The current dividend yield is about 1.6%, and the payout ratio is just 18.8%.
SAN shares quickly rebounded from the Iran oil shock, nearly making a new 52-week high in early April. But renewed tensions have pushed the stock back to the 50-day moving average, which had previously served as support. If this level once again acts as support, investors have a good opportunity to open new positions before the bounce.
The Relative Strength Index (RSI) will tell the story: if it remains above the bullish threshold of 50, SAN shares will likely bounce off the 50-day MA and continue to ascend. The company’s next catalyst comes on April 29 when it reports Q1 2026 earnings.
Erste Group: Acquisitions Boosting Key Banking Metrics
Erste Group Bank AG (OTCMKTS: EBKDY) is a $45 billion Austrian banking powerhouse that recently completed an acquisition for a 49% stake in Santander Bank Polska. This move makes Erste one of the largest asset holders in Poland, and continues the growth of its profile in Eastern Europe.
But most importantly, management expects this acquisition to grow EPS by 20% and boost 2026 ROTE to 19%. If Erste can reach these goals, the stock’s present valuation looks exceedingly cheap at just 10 times forward earnings and 1.16 times book value.
The company reports Q1 2026 earnings on April 29, and investors will be looking for any changes to the outlook following the acquisition's finalization.
The stock peaked following the close of the acquisition, a typical ‘sell the news’ profit-taking reaction.
But it may have turned into an overreaction, driving the stock down toward the 200-day moving average. The 200-day MA turned into a reversal zone, though, boosted by a bullish MACD crossover.
EBKDY shares have also now pulled back to the 50-day MA ahead of earnings as investors digest the geopolitical environment, but there’s lots of upside potential in the company’s upcoming Q1 2026 earnings report.
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