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- Mark Mobius generally avoids buying bank stocks, saying their operations are too opaque.
- More Fed rate hikes could add pressure on bank deposits, potentially creating new havens, he told CNBC.
- Mobius said he has an account in a Dubai bank, and recommended that depositors diversify.
Billionaire investor Mark Mobius said he avoids buying bank stocks and recommended keeping deposits diversified.
The ongoing banking turmoil — exacerbated by rising interest rates that are devaluing long-term bonds held on bank balance sheets — is creating tremendous uncertainty that won't go away quickly, he told CNBC on Wednesday.
With worries about traditional havens like Switzerland on the rise, other global financial centers like Middle East banks that are "rich with petrodollars" could emerge as new destinations for safety, Mobius said.
But investing in banks is a different matter.
"I'm very, very skeptical of banks generally, even the petrobanks, because they're so opaque," he said. "You really don't know what's going on behind the scenes, as we've learned now with the situation in the US. So I stay away from banks generally. In terms of keeping my cash, yes. But investing, no."
The remarks come after the failure of Silicon Valley Bank and Signature Bank ignited worries about other regional lenders, spurring a rush of withdrawals and calls for federal deposit insurance to expand.
Despite his concerns about buying bank stocks, Mobius still feels safe putting his cash in banks, noting that he has an account in Dubai. "I think they're pretty safe."
But he still urged some caution, saying depositors should be diversified. "You can't put all your eggs in one basket," he added.
Earlier this month, he told Fox Business that he couldn't get his money out of an HSBC account in Shanghai, saying the Chinese government was restricting the flow of money out of the country.
Mobius also noted Wednesday that investors have begun looking for alternative safe havens, such as gold and bitcoin, while warning that further rate increases in the US will worsen the financial health of the rest of the world.
That comes as the Federal Reserve meeting concludes later Wednesday with a decision on whether benchmark rates will continue to climb.
Rapid policy tightening has caused concerns over bank liquidity, after Silicon Valley Bank couldn't cover losses on its bond portfolio. Similar worries about Credit Suisse caused significant deposit outflows, before it was taken over by UBS.
"If the Fed keeps on raising rates, you're going to have a lot of banks in trouble," Mobius said.