The banking sector seems to be performing well in 2025 as the economy has been stronger than expected. Banking and financial services companies are taking more chances and investing in growth, especially in AI. At the same time, central banks around the world continue to lower interest rates, which is further helping the banks.
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In December 2024, Seana Smith, the anchor of Yahoo Finance’s morning show, pointed out that it might be a good time to buy bank stocks. Heading into 2025, that was the overwhelming consensus among well-known strategists. The reasons for optimism around bank stocks included a strong economy, expected deregulation under President-elect Donald Trump, attractive stock prices, and lower interest rates.
Brian Belski, Chief Investment Strategist and leader of the Investment Strategy Group at BMO Capital Markets, noted in his 2025 outlook that financial stocks are still “drastically unloved,” despite compelling valuations and strong earnings growth expectations. Aadil Zaman from Wall Street Alliance Group mentioned that the Federal Reserve’s expected drop in interest rates would result in greater investment banking activity.
Another reason for the sky-high enthusiasm was that historically, financial stocks have performed well under Republican administrations because of expectations for looser regulation, which creates a more favorable environment for banks.
With this background in mind, let’s take a look at the 13 best-performing bank stocks so far in 2025.
A city skyline with multiple regional banks in the foreground.
Methodology
To compile our list of the 13 best-performing bank stocks so far in 2025, we used the Finviz stock screener to look for bank companies with the best year-to-date performance. We narrowed down our list by looking for the best-performing stocks with a market capitalization of more than $2 billion. The 13 best-performing bank stocks so far in 2025 were then ranked in ascending order based on their year-to-date performance as of February 14, 2025.
Additionally, we mentioned the hedge fund sentiment surrounding the best-performing stocks, which was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
13 Best Performing Bank Stocks So Far In 2025
13. Deutsche Bank AG (NYSE:DB)
Year-to-Date Performance: 17.69%
Number of Hedge Fund Holders: 12
Deutsche Bank AG (NYSE:DB) is a German multinational investment bank and financial services company that offers retail and private banking, corporate and transaction banking, lending, and asset and wealth management products and services. Deutsche Bank AG (NYSE:DB) also provides focused investment banking to private individuals, small and medium-sized companies, corporations, and institutional investors. DB is one of the best-performing stocks in the banking sector.
The company is strategically focused on enhancing profitability by optimizing its business model and reallocating capital where necessary. This includes reviewing lending portfolios and investing in technology and automation to increase operational efficiency. Deutsche Bank AG (NYSE:DB) is making good progress on its EUR 2.5 billion operational efficiency program. The bank is streamlining its platform in Germany and reducing its workforce, notably in roles that do not engage directly with clients. By the end of 2024, Deutsche Bank AG (NYSE:DB) had realized or expected savings of EUR 1.8 billion to achieve around 75% of the program’s total savings goal.
12. Bank OZK (NASDAQ:OZK)
Year-to-Date Performance: 18.79%
Number of Hedge Fund Holders: 27
Bank OZK (NASDAQ:OZK), previously known as Bank of the Ozarks, is a regional bank that provides a range of personal and business financial solutions and banking services. Headquartered in Little Rock, Arkansas, the bank has over 240 offices in 9 US states. Bank OZK (NASDAQ:OZK) offers online and mobile banking, checking, savings, business banking, loans, trust, and wealth solutions and services.
On January 21, 2025, Stephens analysts raised their price target on Bank OZK (NASDAQ:OZK) to $57 from $53, while maintaining an ‘Equal Weight’ rating. This decision follows Bank OZK’s (NASDAQ:OZK) fourth-quarter earnings, which surpassed expectations. The company’s strong performance was driven by effective cost management and strong loan growth, especially in the Corporate and Investment Banking (CIB) sector. Bank OZK (NASDAQ:OZK) reported a pre-provision net revenue (PPNR) of $272 million to beat the consensus forecast of $262 million. The bank’s earnings per share (EPS) for Q4 2024 also outperformed analyst predictions, supported by a robust loan expansion that surpassed Stephens’ forecasts.
Stephens’ analysts noted that Bank OZK (NASDAQ:OZK) had de-risked some of its larger Real Estate Specialties Group (RESG) loans. In 2024, the bank reevaluated 46% of its RESG balances, which led to an increase in the weighted average loan-to-value (LTV) to 44%. Additionally, the balance of substandard loans saw only a small rise of 5%. The stability in credit was viewed as a positive sign that can potentially boost investor confidence. The analysts believe that this stability is likely to increase confidence in the short term. As of February 14, 2025, Bank OZK (NASDAQ:OZK) has surged more than 18% year-to-date.
11. Banco de Chile (NYSE:BCH)
Year-to-Date Performance: 19.71%
Number of Hedge Fund Holders: 9
Banco de Chile (NYSE:BCH) is a Chilean bank and financial services company that ranks among the best-performing stocks in 2025. The company offers a range of retail and commercial banking services to clients. It is one of the largest banks in Chile in terms of total loans.
A key area of focus for Banco de Chile (NYSE:BCH) is customer satisfaction. The company is focused on a digital strategy as it aims to increase profitability and position itself for long-term growth. In 2024, the bank reported growth in its main digital account ‘FAN’, which achieved 1.7 million customers. Banco de Chile (NYSE:BCH) also introduced new digital accounts like ‘FAN Ahorro’ and a current account for university students as it seeks to further expand its customer base. The company also improved its main banking app by adding new features and integrating its insurance platform to allow customers to manage their policies within the app.
Banco de Chile (NYSE:BCH) is committed to becoming a fast, secure, and fully digital bank. The banking company has digitalized branch sales and service processes to encourage greater adoption of online channels. These initiatives have helped the company reduce its branch network by 12% in 2024. Headcount also declined by 5% as Banco de Chile (NYSE:BCH) seeks to optimize resources for overall efficiency and greater profitability.
10. Lloyds Banking Group plc (NYSE:LYG)
Year-to-Date Performance: 19.81%
Number of Hedge Fund Holders: 10
Lloyds Banking Group plc (NYSE:LYG) is a leading UK-based financial services group that is primarily focused on retail and commercial customers. The group provides a wide range of banking and financial services through a portfolio of 16 unique brands that includes Lloyds Bank, Bank of Scotland, and Halifax. Lloyds Banking Group plc (NYSE:LYG) ranks among the top-performing stocks in the banking sector.
The corporation is strategically investing in digitization, advanced technologies, and AI to improve customer experiences and overall efficiency. Lloyds Banking Group plc (NYSE:LYG) has established an AI Centre of Excellence that brings together specialists from various fields like data science, advanced analytics, and AI ethics. To strengthen its AI capabilities, Lloyds Banking Group plc (NYSE:LYG) appointed Magdalena Lis as Head of Responsible AI as of February 3, 2025. Previously, in August 2024, the group appointed Dr. Rohit Dhawan as Director of AI and Advanced Analytics. With over 15 years of experience in AI, Lis will oversee responsible development and use of AI to enhance Lloyds Banking Group plc’s (NYSE:LYG) products and services.
Previously, in September 2024, Lloyds Banking Group plc (NYSE:LYG) announced that Lloyds Bank partnered with Cleareye.ai, an AI specialist in the trade finance space. Cleareye.ai’s advanced technology would help automate and simplify processing and compliance reviews of trade documents for Lloyds Bank’s customers.
9. Citigroup Inc. (NYSE:C)
Year-to-Date Performance: 20.26%
Number of Hedge Fund Holders: 88
Citigroup Inc. (NYSE:C), or simply Citi, is an American multinational investment bank and financial services company. It serves customers in more than 180 countries and has a physical presence in 94 markets around the world. Citigroup Inc. (NYSE:C) provides individuals, investors, institutions, and corporations with a comprehensive range of financial products and services. In its home market of the US, the company is a leader in wealth management and a personal bank.
On January 15, analyst Richard Ramsden from Goldman Sachs maintained a Buy rating on Citigroup Inc. (NYSE:C) and raised the price target to $86. Citigroup Inc.’s (NYSE:C) Q4 2024 results surpassed expectations as earnings per share exceeded both Goldman Sachs estimates and consensus data. The company’s performance was fueled by higher net interest income and lower expenses. Additionally, Citigroup Inc. (NYSE:C) is expected to reduce expenses by optimizing operations and enhancing productivity. Despite ongoing restructuring, the company’s revenue growth is projected to remain strong, with forecasts of 3-4% growth in 2025.
The company’s Board of Directors authorized a new, multi-year $20 billion stock repurchase program on January 13, 2025. Ramsden’s rating is based on the company’s strong financial performance, positive outlook, and commitment to returning value to shareholders through stock buybacks.
8. Banco Santander-Chile (NYSE:BSAC)
Year-to-Date Performance: 21.65%
Number of Hedge Fund Holders: N/A
Banco Santander-Chile (NYSE:BSAC), a subsidiary of the Santander Group, is the largest bank in Chile in terms of total assets and loans. The bank provides a wide range of commercial and retail banking services, including loans in Chilean pesos and foreign currencies. In addition to its traditional banking operations, Banco Santander-Chile (NYSE:BSAC) offers a range of financial services like financial leasing, advisory services, and investment management. BSAC is one of the best-performing stocks in the banking industry.
Between 2023 and 2026, the company committed to invest more than $450 million in infrastructure and technology. Banco Santander-Chile (NYSE:BSAC) is strategically growing its customer base with a strong focus on digital services. In the fourth quarter of 2024, the company reported a year-over-year increase of 6.4% in total customers. The customer base reached about 4.3 million and more than 2.2 million out of them were digital customers. Digital customers accounted for 88% of the company’s active customers. In current accounts, Banco Santander-Chile (NYSE:BSAC) reported a strong market share of 23.2% as of October 2024. This is driven by the demand for US dollar accounts that can be opened digitally by the company’s customers.
7. Itaú Unibanco Holding SA (NYSE:ITUB)
Year-to-Date Performance: 22.53%
Number of Hedge Fund Holders: 26
Itaú Unibanco Holding SA (NYSE:ITUB) is a Brazilian financial services company that ranks among the largest banking institutions in Latin America. The company attracts deposits and offers a comprehensive range of retail, commercial, corporate, and private banking services. Itaú Unibanco Holding SA (NYSE:ITUB) has a presence in 18 countries.
The company is making important investments in business operations and new technologies to increase its earnings and strengthen the company for the long term. Itaú Unibanco Holding SA (NYSE:ITUB) has made good progress with regard to its modernization and cloud migration efforts. In the Q4 2024 earnings call, management shared that these initiatives have led to a 99% reduction in high-impact incidents. Itaú Unibanco Holding SA (NYSE:ITUB) is also heavily investing in data science and artificial intelligence and it has more than 470 data scientists and over 390 initiatives using generative AI within the bank. The company is using, testing, and growing more than 1,300 AI models. Additionally, as part of the “One Itaú” project, the company aims to migrate 15 million single-product users to its primary app. By the end of 2024, Itaú Unibanco Holding SA (NYSE:ITUB) successfully migrated 5.3 million clients and plans to complete the migration of the remaining clients throughout 2025.
6. Bancolombia S.A. (NYSE:CIB)
Year-to-Date Performance: 26.22%
Number of Hedge Fund Holders: 13
Bancolombia S.A. (NYSE:CIB) is a financial group in Colombia that ranks among the best-performing stocks in the banking sector. The corporation has a presence in Colombia, Panama, Guatemala and El Salvador. Bancolombia S.A. (NYSE:CIB) offers banking and non-banking solutions for individuals, businesses, and institutions.
On January 28, 2025, Morgan Stanley upgraded Bancolombia S.A.’s (NYSE:CIB) stock rating from “Equal weight” to “Overweight” and also increased the price target to $53, up from the previous $40. This positive outlook on the bank’s future performance is based on the improving economic conditions in Colombia. Morgan Stanley’s economists expect Colombia’s GDP to grow by 2.2% in 2025 and 2.8% in 2026. The interest rates are also predicted to decline to 7.5% in 2025 and 6.8% in 2026 from the current rate of 9.5%. This decrease in interest rates, along with increased consumption, is projected to drive faster credit expansion and overall banking activity. Morgan Stanley’s analysis suggests that Bancolombia S.A. (NYSE:CIB) is expected to benefit from a developing macroeconomic recovery.
5. Nu Holdings Ltd. (NYSE:NU)
Year-to-Date Performance: 29.40%
Number of Hedge Fund Holders: 54
Nu Holdings Ltd. (NYSE:NU) is a digital banking company that offers one of the world’s largest digital financial services platforms to serve customers in Brazil, Mexico, and Colombia. The company has a 100% digital model and it leverages data and proprietary technology to develop innovative financial products and services. Nu Holdings Ltd. (NYSE:NU) ranks among the best-performing bank stocks so far in 2025.
Infuse Asset Management, an investment management company, has a positive outlook on Nu Holdings Ltd. (NYSE:NU). In its Q4 2024 investor letter, the investment management firm noted that the company has an ambitious goal of becoming a leading global company and it successfully surpassed 100 million customers at the start of Q2 2024. Nu Holdings Ltd. (NYSE:NU) is marching towards the next 100 million as it is focused on expanding its market share in Mexico and continues to develop its super app in Brazil. The company has expanded its services for high-income clients, who can now book flights, shop, access payroll loans, invest in ETFs, exchange currency, get business loans, and even get cell phone plans. Infuse Asset Management is confident in the company’s management team and also noted that Nu Holdings Ltd. (NYSE:NU) is growing its revenue by over 30% and margins are approaching 30%.
The company is strategically focused on launching appealing products and expanding its customer base. Recently, on January 21, Nu Holdings Ltd. (NYSE:NU) announced that it has reached 10 million customers in Mexico after doubling its customer base over the past 12 months. Since entering the market in 2019, the company has expanded its products and services from credit cards to include savings accounts, debit cards, and personal loans. The company’s digital model allowed it to reach over 98% of Mexican municipalities, including communities without traditional banks. To accommodate the needs of the local market, which relies heavily on cash, Nu Holdings Ltd. (NYSE:NU) has created a network of more than 30,000 cash withdrawal and deposit locations.
4. Banco Bilbao Vizcaya Argentaria, SA (NYSE:BBVA)
Year-to-Date Performance: 33.03%
Number of Hedge Fund Holders: 8
Banco Bilbao Vizcaya Argentaria, SA (NYSE:BBVA), or simply BBVA, is a Spanish multinational banking and financial services company. With a presence in more than 25 countries in the Americas, Europe, and Asia-Pacific, it is one of the largest financial institutions in the world. Banco Bilbao Vizcaya Argentaria, SA (NYSE:BBVA) has a strong position in the Spanish market and it is also the largest financial institution in Mexico. BBVA is one of the best-performing bank stocks so far in 2025.
The company is strategically focused on innovation and digitization while also growing its customer base. In 2024, Banco Bilbao Vizcaya Argentaria, SA (NYSE:BBVA) added a record 11.4 million new customers. By the end of 2024, the company had over 77 million active customers. This is a growth of 47% from 52.6 million in 2018. The share of new customers acquired through digital channels also increased from 21% in 2019 to 66% in 2024. Additionally, 75% of active customers now use mobile phones as the main channel. This growth, driven by a strong digital strategy, remains a key competitive edge for Banco Bilbao Vizcaya Argentaria, SA (NYSE:BBVA).
Looking ahead, the company is looking to utilize AI and next-gen technologies to further its strategy based on innovation and digitization. Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA) will also be looking to improve operational efficiency and enhance customer experience through advanced technologies and data utilization.
3. Inter & Co, Inc. (NASDAQ:INTR)
Year-to-Date Performance: 33.70%
Number of Hedge Fund Holders: 6
Inter & Co, Inc. (NASDAQ:INTR) is a Brazilian holding company that ranks among the best-performing stocks in the banking industry. The company operates Banco Inter in Brazil and a leading super app serving more than 35 million customers in the Americas. The app provides a comprehensive range of services, including full banking capabilities, investments, credit, insurance, and cross-border solutions. Additionally, Inter & Co, Inc. (NASDAQ:INTR) operates a marketplace that connects retailers from Brazil and the United States.
In 2024, Inter & Co, Inc. (NASDAQ:INTR) reported a record net income of BRL 973 million. This is 3 times more compared to 2023. Through its strong platform and innovative offerings, the company reported a continued rise in engagement and added a record 4.2 million active clients to its platform.
The company is adding to its products and services as it aims to deliver a superior financial supper app with innovative and efficient products. Inter & Co, Inc. (NASDAQ:INTR) launched Forum in Q3 2024, which has attracted millions of users sharing investment tips and news. The company’s commerce platform had an impressive 2024 by successfully integrating commerce with finance. Loop, the company’s loyalty program, added new options for customers to earn and redeem points. Loop now has more than 11 million clients as it continues to expand. Inter & Co, Inc. (NASDAQ:INTR) is also expanding globally. By the end of 2024, 3.9 million clients were using the company’s global account service, which makes it easy to invest, travel, and send money internationally.
2. Banco Santander, S.A. (NYSE:SAN)
Year-to-Date Performance: 35.09%
Number of Hedge Fund Holders: 15
Banco Santander, S.A. (NYSE:SAN), or Santander Group, is a Spanish multinational banking and financial services company. It has commercial banks in 15 countries: Argentina, Brazil, Chile, Colombia, Germany, Mexico, Peru, Poland, Portugal, Spain, Uruguay, the US, the United Kingdom, China, and Morocco. As one of the largest banking groups in the world, the company has approximately 165 million customers. Banco Santander, S.A. (NYSE:SAN) ranks among the top-performing stocks in the banking sector.
Overall, the company is focused on simplifying and improving its product offerings and service quality. These efforts have helped Banco Santander, S.A. (NYSE:SAN) grow its customer base by 8 million in 2024 to reach 173 million. In 2024, the company reported an attributable profit of EUR 12.57 billion, a 14% increase compared to 2023. This achievement was supported by strong revenue growth across all global businesses and regions. Additionally, effective cost management helped Banco Santander, S.A. (NYSE:SAN) achieve the best efficiency ratio in 15 years.
In the US, the company is looking to enhance its digital banking capabilities. On February 3, Banco Santander, S.A. (NYSE:SAN) reported that the Openbank digital bank platform surpassed $2 billion in total deposits since going to market in the United States in Q4 2024. The company is effectively boosting national deposit acquisition to support its leading Auto lending franchise and reach its goal of becoming a national, digital bank in the US. Openbank, Banco Santander, S.A.’s (NYSE:SAN) digital-first banking platform, is already Europe’s largest 100% digital bank by deposits.
1. Flagstar Financial, Inc. (NYSE:FLG)
Year-to-Date Performance: 39.94%
Number of Hedge Fund Holders: N/A
Flagstar Financial, Inc. (NYSE:FLG) is a bank holding company for Flagstar Bank, one of the largest regional banks in the United States. Headquartered in Hicksville, New York, the company operates more than 400 Flagstar Bank branches. It has a significant presence in the Northeast and Midwest and also has locations in high-growth markets in the Southeast and West Coast. Additionally, to serve the needs of high-net-worth individuals and businesses, the Flagstar Bank has private banking teams in more than 10 cities in the metropolitan New York City region and on the West Coast. Flagstar Financial, Inc. (NYSE:FLG) ranks among the best-performing stocks in the banking sector.
The company is focused on becoming a top-tier regional bank and as a result, it is undergoing a significant transformation. In 2024, Flagstar Financial, Inc. (NYSE:FLG) strengthened its capital position with a $1.05 billion capital infusion and the sale of several non-core businesses. In November 2024, the company announced the completion of the sale of its residential mortgage servicing and third-party origination business to Mr. Cooper Group for approximately $1.3 billion in cash. This transaction is expected to improve Flagstar Financial, Inc.’s (NYSE:FLG) CET1 capital ratio by 60 basis points. This move is part of a broader strategy of simplifying the business model and transforming Flagstar Financial, Inc. (NYSE:FLG) into a regional bank that specializes in Retail Banking, Commercial and Private Banking, and Commercial Real Estate lending.
Overall, FLG ranks first among the 13 best-performing bank stocks so far in 2025. While we acknowledge the potential of bank stocks, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FLG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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