Fund manager Cole Smeed says there are opportunities in the banking sector despite concerns about rising volatility and deep losses for some financial institutions. Smead Capital portfolio managers said Monday they are buying shares in regional lender Western Alliance Bank, even though the KBW Regional Bank Index fell more than 7% last week. This stock represents 1.36% of Sumed Value Fund. The decline in bank stocks was driven by investor concerns that unexpected losses on New York Community Bancorp's commercial real estate (CRE) loans signaled broader problems for the sector. Investors are worried that other financial institutions will be forced to crystallize CRE losses amid high interest rates and prolonged post-pandemic office vacancies. In Europe, Switzerland's second-largest bank, Julius Baer, recently disclosed $700 million in losses on commercial real estate loans. “The bank that made the wrong decision is the one who [other] Bank pricing looks attractive,” Smead told CNBC's Squawk Box Europe. “You can go buy bank stocks at below book value. “And these banks are generating returns on equity of over 10%. Book value is calculated by subtracting a company's assets from its liabilities. As an equity investor who enjoys finding opportunities like this, this is heaven on earth,” he added. Smead also said Western Alliance Bank's relatively high return on equity (RoE), a measure of how efficiently a company generates profits, and its strong track record make it attractive. He said it was an investment. Smeed believes banks that achieve double-digit ROE over a five- to 10-year period should trade above book value, but the sector is completely “We are not out of the woods,” he warned. “This stock could double.'' Smeed said there are similarities between European and U.S. banks in that there are attractive valuation opportunities on both sides of the Atlantic. Fund managers remain bullish on European banking giant UniCredit despite headwinds in the European economy. He believes that if UniCredit buys back shares while the stock is trading below book value, book value growth could be higher than the current 8% return on equity. “When you buy back your own shares at less than book value, there is a multiplier effect on book value growth,” Smeed explained. UniCredit on Monday reported a full-year 2023 return on equity of 16.6%, beating Smead's expectations. “At this level of return on equity, this stock could be worth twice its current multiple,” Smiad later told CNBC Pro. The stock is the second largest holding in Smead International Value Fund at 8.22%. Additionally, UniCredit's decision to write down the value of its Russian assets to zero makes Smiad believe the bank is “structurally too profitable” compared to its listed assets. The fund manager expects UniCredit to trade above book value over the next 12 to 18 months and use its shares to pursue further acquisitions.