The Invesco KBW Bank ETF (NASDAQ:KBWB) is down roughly 19% year-to-date, compared to the S&P 500 which is down at least 16% year-to-date.

The Invesco Bank ETF offers exposure to U.S. banks, consisting of about 25 individual holdings, with over one third of the fund’s total assets are dedicated to the top five holdings.

With a potential recession looming in the U.S., bank stocks have been dragged down substantially, but more pain could come. This can be attributed to rising interest rates, which can cause less demand for loans and higher losses on these loans, eating away at profitability and revenue growth.

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On the other hand, when interest rates are rising, bank stocks can see their net interest income grow due to expanding margin spreads on interest rates.

If you are up to the risk, these two global banking stocks with attractive yields could be potential buys.

• Royal Bank of Canada (NYSE:RY), one of the two largest banks in Canada, is offering a dividend yield of 3.92% or $3.84 per share annually, through quarterly payments, with a strong track record of increasing its dividends for seven consecutive years. In the third quarter, the Royal Bank of Canada reported net income of $3.6 billion for the quarter ended July 31, 2022, down $719 million or 17% from the prior year. The bank offers personal and commercial banking, wealth-management services, insurance, corporate banking, and capital markets services.
• The Bank of Nova Scotia (NYSE:BNS) offers a dividend yield of 5.92% or $3.04 per share annually, utilizing quarterly payments, with a decent track record of increasing its dividends for three consecutive years. The global bank offers a range of advice, products, and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. For the fiscal year 2022, The Bank of Nova Scotia reported net income of $10.2 billion, compared to $9.96 billion last year, and diluted earnings per share of $8.02, compared to $7.70, in 2021.

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