It's not foreclosures or bad paperwork—it's being stuck in slow-growth economies while the developing world and its banks are booming. So, what's an investor to do?

Here's my big insight for today: US banks have a big long-term problem.

But not the one you're thinking of right now. (Yes, I do have secret powers and can tell what you're thinking—although only about bank stocks.)

The headlines are full of news on robo-signers, mortgage foreclosure moratoriums, and put-backs that will cost banks billions over the next five years and drag out any resolution of the US mortgage crisis.

But that's not the biggest problem facing US banks and not the one that in the long term will doom them to second-class global status unless they can fix it.

What's that problem? The big US banks—JPMorgan Chase (NYSE: JPM), Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), and Citigroup (NYSE: C)—are locked out of the world's fastest-growing banking markets (emerging economies, especially in Asia) and are locked into some of the slowest-growing (the United States and Europe). And I don't see an easy way in the long term for these US banks to break out of their slow-growth trap.

And that—if you agree with the argument I lay out below—should determine how you invest in these stocks, if you invest in them at all.

The Current Slump

Let me pick on JPMorgan Chase, the best managed of the big US banks and the one that came through the financial crisis in the best shape, to illustrate the problem. In its October 13 third-quarter earnings report, JPMorgan Chase announced disappointing revenue results: A drop of 15.4% from the third quarter of 2009.

Some of that decline was because of the widely anticipated drop in trading volumes, and therefore, in trading revenue in the quarter. Revenue from JPMorgan Chase's investment banking business fell to $5.4 billion, down from $7.5 billion in the third quarter of 2009 and $6.3 billion in the second quarter of 2010.

But let's look at the rest of the company's core businesses. In retail financial services, revenue fell 7% from the third quarter of 2009. The part of that larger unit called retail banking showed a 3% decline in revenue from a year earlier. Credit services net revenue fell 18%, and mortgage banking net revenue fell 7%.

Now, you can say that those drops in revenue were the result of a slowing US recovery and assume that revenue will grow again when the US economy comes out of this slump in the recovery—in, economists now project, the second half of 2011.

And I'd totally agree. That's why a stock such as JPMorgan Chase is a good medium-term buy and why I added it to my Jubak Picks portfolio on September 16 with a target price of $55 a share. (To see more on this pick and my entire Jubak's Picks portfolio, go here.)

Buying a good US bank stock in anticipation of a stronger US economy in the second half of 2011 is a good idea.

The Longer View

But that's just the medium term. Remember I said that US banks have a big long-term problem?

They do. It's called slow growth in the world's developed economies, where these banks do the bulk of their business. Much slower growth than in the world's developing economies.

Look at the latest economic projections from the International Monetary Fund (IMF) to get a feel for the growth disparities.

On October 6, the IMF released its forecast for global economic growth in 2010 and 2011. Developed economies are projected to grow, on average, 2.7% this year and 2.2% in 2011. The deceleration will begin in the second half of 2010 and continue into the first half of 2011, before growth picks up again in the second half of 2011. (With the IMF looking for just 2.2% growth for the entire year, the first half of 2011 could be very rocky indeed.)

The IMF projected that the US economy will grow 2.6% in 2010 and 2.2% in 2011. The economies of the euro zone are expected to grow an average of 1.7% in 2010 and 1.5% in 2011.

Developing economies, on the other hand, are projected to grow, on average, 7.1% in 2010 and 6.4% in 2011. China's growth likely will slow to 9.6% in 2011 from a projected 10.5% in 2010. India will grow 9.7% this year, the IMF projects, and 8.4% in 2011.

Add in the contrast between a saturated banking market in the US and a huge unbanked population in the developing world, and the gap in relative growth potential gets even larger. Consulting company McKinsey estimates a global count of 2.5 billion people who aren't served by either formal or informal banking institutions. About 2.2 billion of these live in Africa, Asia, Latin America, and the Middle East.

Not all of these unbanked people will become banking customers anytime soon. Many are too poor or live in remote areas. But the figures do give a general feel for the potential in developing economies.

You can get a more precise measure by looking at financial products such as credit and charge cards. In 2005, credit and charge cards per capita in the US stood at 2.53, according to the International Trade Administration. That same year, credit and charge cards per capita stood at just 0.02 in India and 0.38 in Brazil. No wonder consulting company RNCOS projects compound annual growth in credit and charge card numbers in developing countries of 12% from 2010 to 2013.

NEXT: Who's Getting in This Game?

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Getting in the Game

This would seem to be a huge growth opportunity for a bank such as JPMorgan Chase. But 75% of the bank's revenue now comes from the United States. And getting into many of these emerging markets, especially Asia, is going to be quite a challenge.

To understand how big a challenge, compare JPMorgan Chase with Standard Chartered (OTC: SCBFF), a bank with its roots in Asia (despite having its headquarters in the United Kingdom) and that derives the majority of its revenue from Asia, Africa, and the Middle East.

JPMorgan Chase likes to boast that it has a Tier 1 capital ratio of 9.5% that will let it easily meet the new Basel III rules for euro zone banks. Tier 1 capital is a common measure of a bank's ability to take losses.

Standard Chartered has just announced its second rights offering in the past 15 months in order to raise capital, even though it doesn't need the capital to meet the Basel III standards. The most recent rights offer will take the bank's Tier 1 capital ratio to 12.6%.

So why is Standard Chartered raising this money? Because the bank knows that the price of doing business in much of Asia is a capital ratio that's higher now than the Basel III rules will require. Regulators and institutions in these markets expect banks to have 10%, 11%, and even 12% Tier 1 capital ratios. So, think of the Standard Chartered rights offerings as the price of admission to these emerging markets. (Yes, it does take some rethinking of assumptions if you're an investor from a developed economy and you're used to assuming that developed economies must have tougher financial standards.)

Beyond the price of admission, raising this much capital means that Standard Chartered will be able to meet capital requirements even as it expands its balance sheet. (That's banker speak for "grows.") Many developed-economy banks are raising their capital ratios by shrinking their balance sheets. In other words, they're raising their capital ratios not by adding more capital to the top of the fraction, but by subtracting assets (loans, for example) from the bottom.

That's not a formula for growth, I might note.

The Cost of Capital

So, can't JPMorgan Chase—or any other developed-market bank—raise the capital it needs as the price of entry? Sure. But it's going to be very expensive.

You see, US banks, even good ones such as JPMorgan Chase, aren't as profitable as many of the banks that have already tapped into emerging-market growth. JPMorgan Chase—and remember this is a well-run US bank—earned a return on equity of 8.73% during the last 12 months, according to Morningstar. Standard Chartered earned 12.73% during the same period.

If you decide to raise capital by offering shares, investors would be looking at roughly 50% higher returns with Standard Chartered. That's a recipe that would allow Standard Chartered to raise capital in the financial markets at a much lower cost.

It's also one reason JPMorgan Chase sells at 9.97 times its past 12 months' earnings per share while Standard Chartered sells for 18.23 times. Investors will pay comparatively more for a higher return on equity.

That huge gap in profitability suggests the only way for a JPMorgan Chase to catch a Standard Chartered in the world's new growth markets is to buy it—or a bank like it that already has a huge presence in these markets. And that would be very expensive.

The Best Bank Stocks to Buy

This suggests another way to decide which bank stocks you want to own for the long term:

You can buy shares of the developed-economy banks that already own a big piece of the developing-economy banking market and are positioned for growth in those markets because of their histories and their profitability. On that list I'd put Standard Chartered, Banco Santander (NYSE: STD), and HSBC (NYSE: HBC). You can also buy local developing-market banking leaders such as Itaú Unibanco (NYSE: ITUB) or Banco Bradesco (NYSE: BBD) of Brazil, or HDFC Bank (NYSE: HDB) of India.

Or you can buy the shares of banks with a big presence in developing economies that, for one reason or another, aren't so very expensive. The one that comes to mind here is Citigroup, once one of top franchises in developing economies. The bank still has a tremendous banking network and very high name recognition in these economies. And it sells, for about $4 a share, at a market cap of just $120 billion. That's a fair hunk of cash but still well short of the $150 billion market cap of JPMorgan Chase (about $38 a share).

And the nice thing is that while you wait for somebody to decide that the best way to buy into the developing economies is by buying Citigroup, in the midterm, you've got a good chance of making a profit on the recovery in the US economy in the second half of 2011.

Maybe the only thing Citigroup doesn't have going for it is a good chance to produce a positive return for an investor in the near term—say, the next six months—if the US economy continues to weaken.

But then, you could say that about any US bank in the near term, couldn't you?

At the time of publication, Jim Jubak did not own shares of any company mentioned in this column in his personal portfolio. His new mutual fund, Jubak Global Equity (JUBAX), may hold positions in these stocks, and positions may change at any time.

Jim Jubak has been writing "Jubak's Journal" and tracking the performance of his market-beating Jubak's Picks portfolio since 1997 on MSN Money. He is the author of a new book, The Jubak Picks, and he writes the Jubak Picks blog. He is also the senior markets editor at MoneyShow.com.