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The Banks
Does It Get Any Better For The Big Four?
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nipper
post Posted: Mar 18 2021, 06:08 AM
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In Reply To: early birds's post @ Mar 16 2021, 10:48 AM

QUOTE
as long bond yields shooting up , that is really good for banks to earn more on wide spreads


You got it in one, Prof EB, and if the yield curve is flattened at 0.1% out to 2024 as our RBA says, in unlimited amounts, then our big building societies are in a sweet spot for a few years.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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early birds
post Posted: Mar 16 2021, 10:48 AM
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as long bond yields shooting up , that is really good for banks to earn more on wide spreads between central banks rate and long end rate [10 years eg]

that is the main reason for most of the bank price went up a lot these days, seems it will keep going for a while for few other reasons, divys yields eg......




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nipper
post Posted: Mar 10 2021, 07:53 PM
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The Australia and New Zealand Banking Grp share price jumped 2.2% to $29.34, its highest since August 2018. Meanwhile, the Commonwealth Bank of Australia share price, Westpac Banking Corp share price and National Australia Bank share price have jumped to a one year high.

Morgan Stanley believes that ASX bank stocks can keep outperforming thanks to economic growth and central bank action. The reason and it's to do with rising bond yields, particularly longer-dated bonds. Yields have been rising due to the improved economic outlook and rising inflation expectations.

QUOTE
While central banks have remained resolute in fixing low short end yields, the messaging around long end rates has been one of managing the pace rather than the level of yields ... particularly as driven by expectation of fiscal stimulus," said Morgan Stanley. This has put some pressure on valuations, with the market [12-month forward price/earnings] multiple derating from 19.6x to 18.3x through February.


but if banks can borrow at 0% (which essentially they can) and lend at 1.6 or 2% and it is unlimited access, then I guess they will. Party isn't over.... another 10 to 20% upside, especially if they can pay juicy dividends



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Feb 19 2021, 08:40 AM
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In Reply To: early birds's post @ Feb 19 2021, 07:43 AM

too true eb . I see quite a few punters asking if it is time to go in to the banks ...probably not, because they have done the run. I think Glen Dyer covered it quite well in his article.

QUOTE
.... investor switch to focus to more traditional value stocks

... solid earnings update

.... emerged from the COVID-driven pandemic selloff in solid shape with little of the feared bad debt concerns.

.... material drop in deferred loans

... small business deferments have also fallen sharply




--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
early birds
post Posted: Feb 19 2021, 07:43 AM
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In Reply To: early birds's post @ Feb 17 2021, 09:01 AM

Shares in ANZ hit their highest level in a year yesterday, putting behind the ravages of COVID and the lockdowns after a solid December quarter trading update.

ANZ joined rivals Commonwealth, NAB and Westpac in justifying the big rally in their shares since early November with its update showing a sharp rise in unaudited cash earnings.

ANZ said its unaudited statutory profit after tax for the first quarter of the financial year was $1.6 billion, up from a quarterly average of $773 million the first half of last year.

The quarterly trading update was a first for ANZ since the Global Financial Crisis to keep the market informed during the uncertain environment brought on by the coronavirus pandemic.

That saw the shares touch a day’s high of $26.95, the highest they have been since the same week of February, 2020.

They closed Thursday at $26.55, up 2.8% on the day.

The confident ANZ update and share price rise was matched by Westpac with a rise of nearly 3% on the day, but NAB and CBA shares both dipped (by 0.3% and 0.8% respectively).

The big four have seen 20% plus rises in the value of their shares since late October-early November as investors realised they had been damaged by COVID.

The appearance of successful vaccines also helped switch investor focus to more traditional value stocks and the banks have rewarded that returned attention from the market with solid earnings update – the CBA for the half year to December and the ANZ, NAB and Westpac for their first quarters.

ANZ’s higher cash profit for the December quarter is another sign the big four banks have emerged from the COVID-driven pandemic sell-off in solid shape with little of the feared bad debt concerns.

But they still have to weather the downturn expected after JobKeeper and JobSeeker are ended in around six weeks (or reduced to a more targeted scheme).

Still all banks have seen a material drop in deferred loans -housing especially – and small business deferments have also fallen sharply as business activity improves from the hit administered by COVID-19.

CEO Shayne Elliott said the bank’s performance had been strong during volatile trading conditions, which “again highlights the benefits of disciplined execution of our strategy as well as maintaining a simpler and well-balanced portfolio of businesses”.

“We’re pleased to have achieved these results for shareholders while also helping customers in difficulty and providing the vital lending needed to support the economic recovery,” Mr Elliott said in the update.

Mr Elliott also said all its major business clients had performed well through the quarter, adding ANZ had expanded its market share of Australian and New Zealand home loans.

Meanwhile ME Bank has claimed that it is close to being sold to the underperforming Bank of Queensland (BoQ).

Fairfax media claim ME Bank’s big super fund shareholders were sent an email last week saying a deal with BoQ was on the table and close to being finalised.

The bank’s smaller fund shareholders have also been asked to sell their shares and forced to sign non-disclosure agreements.

Fairfax said the push to sell ME Bank has been brewing for years, as the lender had never paid its shareholders a dividend and failed to achieve the scale needed to compete with its commercial rivals.

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tongue.gif seems banks are the popular bet for peoples!!



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early birds
post Posted: Feb 17 2021, 09:01 AM
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NAB Result Confirms Rosy Outlook for Banks

The National Australia Bank has joined the Commonwealth in confirming that the country’s big four banks remain in good health as revenue, business and profits ride out the COVID-dominated economy.

The shares price of the big four banks are all up by 22% to 30% in the past three months or so as investors have realised that bad debts, dodgy mortgages and COVID lockdowns would not hurt them.

The CBA told us a week ago that it had come through the December half in good shape and yesterday the NAB said its cash earnings are growing and loan deferrals are falling.

NAB’s cash earnings for the July quarter were 47% higher than the quarterly average of the first six months of last year, partly due to lower credit impairment charges, it said.

NAB reported $1.7 billion in unaudited statutory net profit and $1.65 billion in unaudited cash earnings for the quarter, identical figures to those reported during the December, 2019 quarter in 2019-20.

CEO Ross McEwan said the performance had been “sound” in the competitive, low interest rate environment.

“Improving economic and health outcomes in Australia and New Zealand are encouraging as are the reductions we are seeing in deferral balances,” he said. “However, there are still a number of uncertainties requiring further clarity.”

Mr McEwan said ongoing COVID-19 restrictions and the tapering off government support will have an impact on the big four bank and its customers.

NAB updates its its loan deferrals, which have now fallen to around $2 billion for businesses and $1 billion for home loans as of December 31, compared to peaks of $19 billion for business and $38 billion for home loans.

Also included in the quarterly update, NAB reported lower markets income had pushed revenue down by 3% but expenses fell by 1% as managements forges on with its strategy of streamlining processes.

The bank has approved more than 4000 home loans using the federal government’s first home loan deposit scheme, which allows first home buyers to pay only a 5% deposit and removes the need to pay for costly lenders mortgage insurance.

NAB shares rose 1% to $25.56.

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from our own sharecafe....

 


nipper
post Posted: Feb 11 2021, 08:48 AM
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Some investors seems a little underwhelmed, others were more accepting – but whatever the reaction the Commonwealth Bank’s interim result has set the tone for the rest of the sector for their interims over the next two months.

The big three rivals , Westpac, NAB and ANZ all report in April after the rule off on March 31. Bendigo and Adelaide reports its December half next week and the Bank of Queensland will report its interim (for the half year to February) in mid April.

The CBA has raised expectations on dividends but also softened hopes among some investors for a bigger payoff.

Higher dividends will come for the second half, but no buybacks; that would be too inflammatory with the Reserve Bank helping fund their balance sheets with its Term Funding facility and targeting an ultra low cash rate of 0.1% for the next three years at least, giving the banks certainty of funding costs and protection for their net interest margins.

CBA had a net interest margin of about 2.11% ahead of the pandemic but in the latest half fell 10 basis points to 2.01%. Its peers are all under 2%. That margin will be more stable for the next three years, thanks to the Reserve Bank.

Shares in the CBA rose by 0.3% early on yesterday but then turned lower to end down nearly 1.5% at $86.12. The easiness represented some judicious profit taking after the 25% plus run up in the share price since last November.

The interim dividend of $1.50 a share was better-than-expected (analysts thought $140 to $1.45) and the $3.9 billion cash profit was in line with expectations.




https://www.sharecafe.com.au/2021/02/10/mut...to-cba-interim/






--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
early birds
post Posted: Feb 8 2021, 08:11 AM
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Monday Market Minutes: Bank Romance Rekindled

The ASX is rising strongly and for an explanation, look at the way some old favourites have come back and ignore all that talk about the influence of tech stocks like Altassian, WiseTech or fintechs such as Afterpay and Zip and even CSL.

By close of business Friday we saw the big four banks – the Commonwealth, Westpac, NAB and ANZ – underline their importance to the local market.

While the ASX 200 rose 3.5% last week, the share prices of the big four were up by between 4.8% and 7.2%.

A peg for the increased investor interest was the interim results from the Commonwealth Bank on Wednesday. These are expected to be solid, but after an interim of $2 a share was paid a year ago (before the pandemic hit), the payout may not rise all that much, if at all.

It will be the signal the bank sends for the second half – a 98 cents a share payment was made a year ago for the June half and this year it will be much higher.

The cap placed on payouts by APRA, the key regulator, has been eased

After being hammered in the pandemic and sell off and ignored in the post-March rebound by investors with tech and retail stocks in their eyes, the usual drivers of ASX performance have come back hard since November when talk about the early successes with COVID vaccines saw the start of as rotation away from techs etc and back to more traditional value stocks such as industrials and banks.

And their rise has continued, helping push the ASX 200 up more than 10% in the past three months.

Friday saw Wall Street finish with modest gains and that saw the ASX futures platform end 5 points higher – pointing to a soft start later this morning.

The ASX200 ended at up 1.1% 6,840.5 on Friday while the All Ordinaries rose 1.07% to 7,112.9.

Friday trading saw the ASX recoup all of Thursday’s losses and lifted the market by 3.5% last week, with solid gains by the big four banks a major factor.

Shares in the ANZ rose 2.06% on Friday to end at $25.29; the Commonwealth Bank added 1.82% to $88.64, National Australia Bank lifted 2.15% to $25.23 and Westpac closed up 2.03% at $22.15.

But when we look at the three months to Friday, the big four banks stand out.

Together the big four have boosted their collective market value by more than $106 billion in the past three months.

Commonwealth shares rose 6.14% last week to take the three-month gain to 27% and its market cap to $155 billion.

NAB shares rose 7.2% last week for a gain of 28.9% for the last three months and a lift in the market value to more than $81 billion.

ANZ shares rose 5.8% over the week which took its gain for the past three months to 28.3% and its market value to more than $74 billion.

Westpac lagged, as it has been doing for the last 18 months with a gain of 4.8% last week and 24.6% over the three months which lifted its market cap to $79 billion.

The big iron ore miners have done well in the past three months as global iron ore prices hit a series of multi-year highs. BHP shares are up 26%, Rio shares up 21% and Fortescue shares are up 40%.

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from our own sharecafe,

 
nipper
post Posted: Dec 27 2020, 02:21 PM
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they all say this
QUOTE
Demographically, Australia is a relatively small market; but the combination of the new consumer data right (CDR) regime, which closely resembles Britain’s more longstanding open-banking framework, and a scene dominated by the relatively slow-moving big four banks has proved alluring.

The ACCC has only accredited six data recipients under the government’s consumer data right, a core policy to foster more competition in banking. Of the six accredited parties, the only bank is Regional Australia Bank (RAB).

The ACCC is assessing applications from 40 parties working through the accreditation process, while more than 100 others are engaged with the regulator about potential involvement.





--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
early birds
post Posted: Dec 17 2020, 08:30 AM
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In Reply To: BobE's post @ Dec 17 2020, 08:24 AM

not too worried about it BobE
IMHO, today is thursday [option day] , my guess is "sell odder will be matched by buy odder at 10:00 pm" it's just game that big market maker playing.
cheer it out mate!! tongue.gif




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