Forget Citigroup, Northern Trust Is a Better Bank Stock
Recessions are generally a lousy time to own bank stocks. Loan portfolios tend to become troubled, assets are written down, and book values fall. The losses and writedowns often extend past the bottom of the recession and into part of the rebound.
But if you think the worst of the coronavirus-induced economic downturn might already be over and you want to dip a toe into the banking sector, you might want to stick with the banks with the lowest credit risk. Citigroup (NYSE: C) is more of a traditional bank that makes its money by taking credit risk. Northern Trust (NASDAQ: NTRS) is a specialized bank which earns its income mainly from fees. Depending on the economic backdrop, one model may be preferable to the other.
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Source Fool.com
