Although many financial stocks have seen a recovery this year thanks to high profitability and increased demand, some have not been so lucky. The financial sector remains one of the most profitable industries in the world, yet there are many reasons why financial stocks can underperform.

Even as the sector experiences a recovery from periods of hardship, such as the collapse of Silicon Valley Bank, there are a few financial stocks that analysts say would be unwise to hold.

Comerica $CMA

Comerica is an American financial services company with more than four hundred offices across the United States, including Texas, Michigan, California, Florida and Arizona. At first glance, Comerica appears to be an ideal investment option for investors interested in financial stocks. With a market capitalization of around $7.4 billion and a wide range of customers across the country, it would seem that this company is well on its way. However, a closer look at the current news surrounding the company reveals a different story.

Comerica's recent delisting from the S&P 500 is a clear sign of trouble. According to a Fortune 500 report, Comerica, along with two other companies, has been dropped from this prestigious index. Although no official reason has been given, it is likely that the main factor is market capitalisation, which must be at least $12.7 billion to be included in the S&P 500.

In addition, even though the second quarter results beat analysts' estimates, the company's stock fell in the market. The U.S. Treasury Department also informed Comerica that it will no longer be selected for the exclusive provision of the Direct Express card. According to the report, the company's net profit fell to $206 million from $273 million, although it beat analysts' estimates of $165.4 million.

KeyCorp $KEY

KeyCorp is the holding company for KeyBank National Association, a U.S. bank based in Cleveland, Ohio. As one of the 30 largest banks in the U.S., it is known for its various retail and commercial financial products and services. It is also known for its high dividend rate, which currently stands at approximately 5.50%.

If you are considering an investment in KeyCorp or are already invested in the company, you should reconsider your decision. Recent news about the company has been unfavorable, especially the most recent quarterly report. According to this report, KeyCorp performed poorly in all key metrics such as revenue and net income.

The company had total quarterly revenue of $1.53 billion, down 4.3% year-over-year. Net income from continuing operations attributable to common shareholders fell 5.2% to $237 million.

In a year when financial stocks have enjoyed extraordinary profitability, KeyCorp is one of the few that have been unlucky. Whether the stock will recover this year is still unclear.

SoFi Technologies $SOFI

SoFi Technologies is an American financial services company and online bank based in San Francisco, California. The company offers several financial products, including student loan refinancing, mortgages, personal loans, credit cards, investing and banking.

Financially, SoFi Technologies has not fared poorly this year. On the contrary, it achieved impressive results, as its latest quarterly report shows. According to this report, the company achieved net sales of $645 million and net income of $88 million.

This puts it among some of the most profitable companies in the financial sector. From an investor's perspective, however, the question is whether it will be able to maintain that profitability, given that one of its main products is student loan refinancing, and students typically don't have high net worth or capital liquidity. The company's current focus on personal loans exposes it to a high risk of default.

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Source: Yahoo Finance.