Bank shares are copping it from multiple directions.
Not only do they have to deal with the banking royal commission, massive fines, criminal charges and falling share prices, the investment community is piling on top.
Not surprisingly, the share prices of all the big four banks are taking it on the chin again today, with CBA shares worst hit, falling $1.15 or 1.6 per cent to $69.24.
From The Australian Financial Review just today…
The articles notes that analysts have now turned bearish on the sector, foreseeing higher capital and compliance costs.
Longer term, the risk for bank shares is the threat the government will take action and break up the “four pillar” oligopoly, an action that will boost competition.
This comes at a time when Australia and New Zealand Banking Group (ASX:ANZ) recently said it expects difficult trading conditions for the foreseeable future.
Broker Morgan Stanley has wiped an average of 7 per cent off the share price targets of the big banks, citing operating and regulatory headwinds.
Stating the obvious, the broker said drivers of earnings upside for the banks are hard to identify.
Morgan Stanley placed an equal-weight call on ANZ shares and Westpac Banking Corp (ASX:WBC) shares, and an under-weight call on National Australia Bank Ltd (ASX:NAB) shares and Commonwealth Bank of Australia (ASX:CBA) shares.
Australia’s second richest person has warned tighter bank lending is hurting the property market at a vulnerable time.
Talking his own book, Mr Triguboff goes on to say there is nothing wrong with our banks, claiming they are shell-shocked.
He says the focus by the banks on potential property buyer’s current spending habits is wrong, claiming they’ll divert spending to repay the mortgage once they buy a house or unit.
Never mind the mortgage on your typical $1 million Sydney property will likely be more than what you are currently paying for rent.