Anyone buying banks yet?

[sptrawler]

Can't see the banks having any share price growth ever again.

The government's around the globe need to allow takeovers. And they won't

As the Country grows, it requires funding, the banks supply that.
The Government also want them to be too strong to fail, that means they have to make money, so their balance sheet will have to grow and with it dividends. Just my opinion.

 

[MrChow]

There's probably 2-3 generations that would get a shock if one of the big 4 banks made a loss as they haven't for 30 years.

 

[tinhat]

APRA to remove banks' interest-only lending restrictions

 

[sptrawler]

APRA to remove banks' interest-only lending restrictions

Like they say, be carefull what you wish for, everyone wanted the banks to stop lending money, it looks like that plan is out the window.
Now IMO, all they have to worry about, is silly Billy's brain farts.

 

[jbocker]

In answer to the threads question. No I am not and very unlikely to for the foreseeable future.
I wonder if the big 4 dominance of the ASX will wane over the next few years. Lets see what happens in February.
The big question is what could take their place?

 

[BlindSquirrel]

I think I will wait another 6-12 months although bank shares under $24 are mighty tempting.

 

[Logique]

Not in our preferred client group? That is, a member of an industry super fund, run by a union. Then you must pay tax twice on your bank shares.
Some may think this is white collar crime by government edict, if Labor gets in. I however couldn't possibly comment. Oh well, the self funded retirees would then qualify for the part or full pension. How would that benefit the national accounts

Franking credit change could wipe billions from banks: Citigroup
By Shane Wright & Samantha Hutchinson, 8 January 2019 - SMH: https://www.smh.com.au/business/the...ons-from-banks-citigroup-20190108-p50q84.html
...Citigroup researchers found its target valuations of the nation's major banks could fall by up to 13 per cent in the wake of the franking credit change...
...12-month target share price for the Commonwealth Bank could slip from $72.05 to as low as $63.84.
NAB's target price could fall from $31.12 to $27.21, Westpac's from $29.87 to $26.18 and the ANZ's from $30.19 to $26.89...

 

[funnymoney876]

Why would you buy banks, crypto's will take over the worlds currencies shortly. Banks are archaic!

 

[PZ99]

Crypto is the most spectacular pump and dump I've ever seen.

Give it two years and the entire revolt will be operating out of Nigeria

 

[sptrawler]

Crypto is the most spectacular pump and dump I've ever seen.

Give it two years and the entire revolt will be operating out of Nigeria

Long live the Ponzi.

 

[MarketMatters]

If Isaac Newton was around I'm sure he would invest much like he did in the South Sea Company!

 

[greggles]

Not buying banks yet.

WBC reported terrible FY2019 results this morning, going into a trading halt before the announcement.



WBC said it intends to raise $2 billion via a fully underwritten institutional share placement, and another $500 million via a non-underwritten share purchase plan to give it an increased buffer above APRA's "unquestionably strong" capital benchmark of 10.5%.

The placement will be undertaken at $25.32, a 6.5% discount on the last close and an 8.1% discount to the adjusted five-day VWAP.

There's going to be more carnage to come from the other big banks IMO, so it will most likely be a long time until they represent any prospect for real growth.

 

[PZ99]

That's in addition to cuts in dividends.

I noticed the ANZ also slashed their franking credit down to 70% which is the first such cut in 20 years and sets a bleak future for retirees.

 

[sptrawler]

That's in addition to cuts in dividends.

I noticed the ANZ also slashed their franking credit down to 70% which is the first such cut in 20 years and sets a bleak future for retirees.

It certainly would have been an interesting ride into despair, if the franking credits had been stripped off them as well.
Which all kind of fits in with the problems I mentioned in the aged care thread, where the elderly are seen as soft targets in Australia and they need a Royal Commission to tell them that no one cares about the elderly.

 

[Toyota Lexcen]

Clearly not a case of banks profiteering from not passing on interest rate reductions

Net interest margin reducing

 

[sptrawler]

Clearly not a case of banks profiteering from not passing on interest rate reductions

Net interest margin reducing

Yes but Bank bashing, makes for good headlines in the paper.

 

[kid hustlr]

Why do companies pay a dividend and then turn around do an equity raising.

What am I missing??

 

[Struzball]

Why do companies pay a dividend and then turn around do an equity raising.

What am I missing??

I don't know either.
I'd only be buying Westpac/banks to receive a dividend.
Not to pay them a dividend.

I did buy BOQ recently, interestingly they went up yesterday when all the others went down.

 

[Sharkman]

Why do companies pay a dividend and then turn around do an equity raising.

What am I missing??

i'm just speculating, but i guess they distribute them to make full use of their franking account, those franking credits won't do any good sitting unused in the franking account getting eroded by inflation. holding back on the dividends will annoy retirees and super funds who want those franking credits, and they might sell off their holdings, drive down the stock price and that will hit the execs in the hip pocket. and they won't stand for that!

as for buying more of the banks, i'll probably be applying for the full allotment in the WBC capital raising, it's almost like a free call option at 25.32, so i'll wait right up until the last day, and if it's far enough "in the money" at that time, i'll apply. and immediately start selling ATM covered calls over the extra units until they get called away. unless it's so heavily oversubscribed that everyone only gets like 100 units each or something.

don't particularly want to buy more bank stock at current levels. i'll keep holding what i have, but commit new funds to international index ETFs instead. the divs should hold up, but my guess is their total return is going to be pretty much all div for a while, i can't see much growth (if any at all) for a few years. on top of regulatory and compensation pressures, they're highly dependent on the health of the overall economy. and that seems to be quite anaemic, there is no inflation, no wage growth, the household savings ratio is already down to something like 2%, AND consumer confidence has fallen heavily to something like 92. the two are supposed to be inversely correlated! that's not a good sign for the economy or the banks IMHO.

 

[Toyota Lexcen]

Good post. The banks have to get to a point with ASIC/ APRA that the refunds are over.