Should I buy these FTSE 100 value shares?

At FTSE 100 has rocketed 6% since the beginning of 2023. And last week it closed at a record high above 7,900 points. But the index is still packed with many top-performing stocks.

The following companies trade at a price-to-earnings (P/E) ratio below the FTSE index average of 13.5 times. They will also pay dividends to investors this year. But they are indeed Bargain stocks to buy or just an investment trap?

Standard Chartered

Demand for financial services will continue to grow in Asia. That’s why the FTSE index blind HSBC and Prudential both spent billions over the next few years as they rotated to distant continents.

I already have shares in ‘The Pru’ in my Stocks and Shares ISA. And I’m considering snapping it up Standard Chartered (LSE:STAN) also to expand this increasingly profitable market. The bank also has extensive operations in fast-growing African countries.

News of an upcoming expansion in China’s key market has increased appetite for the stock. Last week, the China Securities Regulatory Commission (CSRC) gave firm approval to establish securities operations on the mainland.

The new unit will cover underwriting, asset management, own account trading and brokerage. This follows Standard Chartered’s pledge a year ago to invest $300m into its China business.

These established banks face a growing threat from digital. But I believe that the level of demand for banking products in emerging markets still makes FTSE companies a top buy today.

I believe it is a very attractive investment at the current prices. Today the bank is trading at a forward P/E ratio of 7.2 times. A 2.5% dividend yield for the year adds extra sweetener.

NatWest Group

I won’t waste my money NatWest Group (LSE: NWG) shares, though. I am concerned about the ability of these FTSE 100 banks to generate large profits given the bleak outlook for the UK economy in the short to medium term.

Unlike StanChart, NatWest relies on UK customers to drive its bottom line. Unfortunately, the industry forecast for this market is quite bleak.

The EY Club’s economic forecast, for example, expects bank-to-business loans to fall by 3.8% in 2023. This would be the biggest annual decline in decades. Meanwhile, mortgage lending is predicted to grow by just 0.4%. This would be the slowest growth rate since 2011.

Abundant structural problems in the economy such as low productivity and labor shortages can also affect the bank’s performance. And many of these dangers threaten to be long in the future.

Today NatWest shares trade at a forward P/E ratio of 6.7 times. They also carry a market-beating 5.4% dividend yield. But I do feel that there is a possibility that earnings and dividend forecasts may decline as the year progresses.

Higher interest rates will increase profits. But I’m not buying the company’s stock today.