3 Bank Stocks With Earnings Tied Closely To Higher Interest Rates

War in the Middle East, oil near $105 and central banks still lifting rates have turned the cost of money into the main story in markets. Higher-for-longer yields can hurt many assets, yet they can also reshape the earning power of selected banks and insurers. This article walks through three stocks from our rates-focused screener that look most exposed to this backdrop so you can judge whether they deserve a closer look or a wider berth.

The three stocks highlighted next are only a starting sample from this higher-for-longer rates idea. The full screen surfaced 39 more banks, insurers and related financials with equally compelling stories that are not covered here. To go straight to the source, analyze and sort potential candidates using the Banks and Insurers Benefiting from Higher-for-Longer Interest Rates screener.

Halyk Bank of Kazakhstan (LSE:HSBK)

Overview: Halyk Bank of Kazakhstan is a leading universal bank in Central Asia, providing corporate, SME, retail and investment banking services across Kazakhstan and nearby markets.

Operations: The bank generates most revenue from Corporate Banking at KZT 729,918 million, with Kazakhstan contributing KZT 3,406,777 million of total geographic income.

Market Cap: US$9.2b

Halyk Bank of Kazakhstan sits squarely in the higher-for-longer rates theme because its lending book and deposit base are tightly linked to local interest-rate decisions, yet that same rate exposure is running into a heavier rulebook that could change how much of each tenge actually drops through to profits.

Higher regulatory burdens, including increases in minimum reserve requirements (scheduled to rise further through 2026) and new corporate tax rates, are set to directly erode net interest margins and reduce future earnings, as more capital will be tied up and effective tax rates will rise.

What really matters now is how one quiet shift in the way those earnings are taxed and capitalised eventually reshapes the bank's margin profile.

That shift in earnings mix is only the starting point, and the full narrative for Halyk Bank of Kazakhstan shows how Halyk Bank of Kazakhstan could turn regulation headwinds into a stronger long term franchise.

Metropolitan Bank Holding (MCB)

Overview: Metropolitan Bank Holding is a New York based commercial and retail bank focused on business lending and deposit services for U.S. clients.

Operations: Metropolitan Bank Holding reports all its US$312 million of revenue from Banking activities within the United States, reflecting a focused domestic franchise.

Market Cap: US$1.1b

Metropolitan Bank Holding sits close to the center of the higher for longer theme, because a plain vanilla lending and deposit model often feels higher policy rates most directly through the spread between what borrowers pay and what depositors earn.

"The ongoing investment in a new technology stack, expected to be fully integrated by the end of Q1 next year, positions the bank to enhance digital services, support greater transaction volumes, and attract new fintech partnerships, driving growth in fee income and supporting stronger revenue growth."

The real swing factor is how one unresolved pressure on its funding base ultimately feeds through to those spreads and long term profitability.

How that funding pressure plays out next is what counts, and the full narrative for Metropolitan Bank Holding lays out how Metropolitan Bank Holding could turn it into accelerating fee and spread momentum.

Banco Santander (BME:SAN)

Overview: Banco Santander is a global universal bank providing retail, SME, corporate and investment banking, wealth management and payments across Europe and the Americas.

Operations: Banco Santander reports most revenue from segment adjustments of €22.7b, alongside sizeable contributions from Corporate & Investment Banking at €8.4b and Openbank at €6.6b.

Market Cap: €182.8b

Banco Santander brings the higher for longer rates theme to a global scale, since its everyday lending and deposit engines stretch across many of the markets now facing stickier inflation and tighter central bank policy.

"Ongoing rate cuts in key markets such as Europe and Brazil risk exposing how dependent profitability has become on currently strong net interest margins and hedge contributions, which could pressure revenue growth once NII moves past its trough."

What really moves the needle is how a single shift in where earnings come from changes the durability of those rate driven margins.

That shift in earnings quality is exactly what the full narrative for Banco Santander unpacks, revealing where Banco Santander could decouple earnings from rate cycles and maintain momentum.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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