Rising Treasury yields, a more hawkish Federal Reserve policy tone, and fresh inflation data on the horizon have quickly reshaped how investors think about interest rate risk and opportunity. When the 10 year Treasury sits near 4.483% and the Fed signals that rate hikes could come as soon as October, banking and financial services stocks on this screener can react in very different ways. Some may find higher yields helpful, and others may feel pressure on funding costs or valuations. This article walks through 3 stocks from the screener that appear positively exposed to the current news backdrop.

Inter & Co (INTR)

Overview: Inter & Co is a Brazil based digital financial group that offers checking accounts, cards, loans, investments, insurance and an e commerce marketplace through a single app for customers in Brazil and the United States. Its platform combines everyday banking with services like foreign exchange, securities brokerage and online shopping, aiming to keep users inside one ecosystem for most of their financial and spending needs.

Operations: Inter & Co generates the bulk of its roughly R$6.3b revenue in Brazil, with about R$5.2b from Banking & Spending, R$695m from Other activities, R$418m from Inter Shop, R$269m from Investments and R$237m from Insurance Brokerage, offset by R$509m of eliminations.

Market Cap: US$2.40b

Inter & Co offers a full service digital bank tied to payments, lending, investments and insurance, at a time when higher Treasury yields and a more hawkish Fed are putting renewed focus on how financial infrastructure providers handle funding and credit risk. The stock currently appears relatively inexpensive on P/E, while analysts expect revenue and earnings growth and see upside to their consensus price target. At the same time, the business carries a high 10% level of non performing loans and less than full coverage reserves. In addition, its newly licensed Miami branch provides a regulated foothold for cross border banking. As a result, rapid expansion, margin trends and credit quality considerations may all matter at once for investors who are monitoring interest rate moves closely.

Inter & Co’s combination of a full service digital bank and e commerce platform, a newly licensed Miami branch and a seemingly low P/E raises a big question: see the 4 key rewards and 2 important warning signs that could change how you view its 10% non performing loans.

Klarna Group (KLAR)

Overview: Klarna Group is a London based digital bank and payments provider that lets shoppers pay in full, pay later or spread purchases over several months. It also offers savings accounts, a shopping app, and tools for merchants to increase conversion at checkout across multiple countries.

Operations: Klarna generates about US$3.8b in revenue from data processing, with roughly US$1.4b from the United States, US$888m from Germany, US$468m from the United Kingdom and US$1.1b from other countries.

Market Cap: US$7.1b

Klarna Group sits at the intersection of higher interest rates and everyday consumer spending, which makes it especially relevant when Treasury yields move higher and the Fed leans more hawkish. The company is growing its buy now, pay later and digital banking ecosystem. Analysts are watching for changes in earnings and returns in the coming years. At the same time, Klarna remains unprofitable today, funds its loans entirely through external borrowing rather than customer deposits, and pays management well above peers despite those losses. For investors, the key question is how these growth ambitions, funding choices and valuation trade off against each other as inflation data and rate expectations keep shifting.

Klarna Group is focusing on growth while still operating at a loss and relying on external borrowing, so the key question is how that trade off appears once you review the analysis report for Klarna Group

Figure Technology Solutions (FIGR)

Overview: Figure Technology Solutions is a US based fintech that uses blockchain technology to power a marketplace for originating, financing and trading consumer and real world credit assets, and also offers services for digital assets, including interest bearing stablecoin deposits.

Operations: Figure Technology Solutions currently generates about US$510.4m in revenue, all from the United States.

Market Cap: US$6.3b

Figure Technology Solutions puts blockchain at the center of consumer lending and credit markets, pairing a capital light, fee driven model with exposure to interest rate trends as Treasury yields climb and rate hikes move higher on the agenda. Revenue and earnings are described as growing quickly, supported by expanding marketplaces like Figure Connect, high quality earnings and partnerships that span banks, credit unions and the planned Kiavi acquisition. At the same time, the stock trades on a high P/E, relies fully on external borrowing rather than deposits, and has a young management team and board that are still proving themselves through rapid growth, ecosystem expansion and tighter monetary policy.

Figure Technology Solutions is focusing heavily on blockchain, external funding and a high P/E. The missing piece is how growth expectations stack up against execution risk in the analyst forecasts for Figure Technology Solutions that could reframe the whole story.

The three stocks discussed are only a starting point, and the full Banking and Financial Services Stocks screener includes 41 more companies with equally compelling banking and financial services narratives tied to health, funding and interest rate exposure. Use Simply Wall St to identify, filter and analyze the specific catalysts and storylines that matter most to you so you can focus on the highest conviction ideas in this space.

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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.