Australian banks still attractive, says DNR Capital


While Australian banks have rarely looked cheaper, the outcome of the ongoing Royal Commission is critical given the modest growth environment as well as regulatory, credit, and competition risks, investment manager DNR Capital says.
if(/Android|webOS|iPhone|iPad|iPod|BlackBerry|IEMobile|Opera Mini/i.test(navigator.userAgent)){
document.addEventListener('DOMContentLoaded',
function() {
var typesArray = {
desktop: [43],
tablet: [43],
mobile: [43],
};
var zoneArray = [287902];
var zoneDivId = '#momentum-azk98074-zoneunit';
changePlacements(true, zoneDivId, typesArray, zoneArray, null);
})
}
.topsuperbanner_default{
width:300px;
height:605px;
background: #efefef;
}
#momentum-azk98074-zoneunit {
width: fit-content;
margin: 0 auto 5px;
}
#momentum-azk98074-zoneunit img {
max-width: 100%;
height: auto;
}
.topsuperbanner_default:empty{display:none;}
Even though the banks have been making the news for all the wrong reasons lately, DNR chief investment officer Jamie Nicol said he is becoming more interested in the banks as they sell off.
Related News:
New ETF provider launched with advisory focus
Adviser demand central to new ETF launches
document.addEventListener('DOMContentLoaded',
function() {
var typesArray = {
desktop: [0],
tablet: [43],
mobile: [43],
};
var zoneArray = [316693];
var zoneDivId = '#momentum-azk98072-zoneunit';
changePlacements(1230436, 10860, true, zoneDivId, typesArray, zoneArray, null, 'momentum-azk98072-zoneunit');
})
.mobile_superbanner_default{
width:300px;
height:605px;
background: #efefef;
}
#momentum-azk98072-zoneunit {
width: fit-content;
margin: 0 auto 5px;
}
#momentum-azk98072-zoneunit img {
max-width: 100%;
height: auto;
}
.mobile_superbanner_default:empty{
display: none;
}
Among the positives, Nicol said the banks currently offer a very attractive dividend yield of close to 7 per cent fully franked.
Also, some of the impacts from the inquiry will ironically be positive for the banks, he said.
document.addEventListener('DOMContentLoaded',
function() {
var typesArray = {
desktop: [0],
tablet: [5],
mobile: [5],
};
var zoneArray = [282282];
var zoneDivId = '#momentum-azk56700-zoneunit';
changePlacements(1230436, 10860, true, zoneDivId, typesArray, zoneArray, null, 'momentum-azk56700-zoneunit');
})
#momentum-azk56700-zoneunit {
width: fit-content;
margin: 0 auto 5px;
}
#momentum-azk56700-zoneunit img {
max-width: 100%;
height: auto;
}
#momentum-azk56700-zoneunit:empty{
display: none;
}
“The inquiry has highlighted lending standards and we are likely to see the banks give greater scrutiny to the expense history of customers, which may potentially cause a sharp slowdown in lending growth.”
Nicol explained that this can be positive for banks because they need less capital to support their loan base.
“CBA is also pushing for a crackdown on mortgage brokers and volume payments, which would push volume through the bank-owned channel.”
Nicol also pointed out that this inquiry may well be the last for a while, and so once it is behind them, they will likely have some “clean air” from a regulatory perspective.
“Overall the banks have underperformed for some time now,” he said.
Recommended for you
Two former senior Global X employees have launched their own ETF provider, ETF Shares, focused on offering index ETFs for advisers and retail investors.
With GCQ Funds Management and Lakehouse Capital making their recent ETF debuts, the two fund managers unpack why financial advisers are essential to their respective launches.
ETF provider Global X is set to launch its latest ETF, focused on artificial intelligence infrastructure.
Index provider MSCI has unveiled two measures to make it easier for financial advisers and wealth managers to access transparent insights into private assets.