Anyone buying banks yet?

[qldfrog]

Having the smallest of small dabs at WBC.
I like having an even number for the 30k parcel I bought.

No idea why the RBA rate drop affected them so much.

The lower the rate the lower the profit... simple
Purely for demonstration
20pc margin on 5pc interest is 5 times more than 20pc margin on 1pc
If rba rate is 5pc banks can lend at 6pc
If it is 1pc, hard to lend at 1.2 with fixed costs etc so imagine at 0.5
Low rate is the death of banks
BTW, if you have any buy on banks today,make sure you look at the us market before the open, and act

 

[basilio]

Bank shares taking a beating. Just noticed BEN falling below $8.

On Feb 18th they announced they had raised $250m through an institutional placement at $9.34. Share price then was around $10...

On Feb 24th they invited current shareholders to also buy in. Price would $9.34 or 2% less than the 5 day day average around March 13th (closing day )

Long story short . BEN has dropped from $10.50 less than 3 weeks ago (Feb 14th) to under $8.00. Anyone been shorting them ?
_______________________

On reflection all the banks have lost dropped at least 20% in the past couple of weeks.

 

[wayneL]

Bank shares taking a beating. Just noticed BEN falling below $8.

On Feb 18th they announced they had raised $250m through an institutional placement at $9.34. Share price then was around $10...

On Feb 24th they invited current shareholders to also buy in. Price would $9.34 or 2% less than the 5 day day average around March 13th (closing day )

Long story short . BEN has dropped from $10.50 less than 3 weeks ago (Feb 14th) to under $8.00. Anyone been shorting them ?
_______________________

On reflection all the banks have lost dropped at least 20% in the past couple of weeks.

Brokers recos have a strong sell on BEN, could explain much of it.

 

[frugal.rock]

On reflection all the banks have lost dropped at least 20% in the past couple of weeks.

At a guess 80% of the market has dropped ~10-40% or more in the last couple of weeks...
The whole thing has been orchestrated by instos...
One example,
Deutsche Bank AG and its related bodies corporate (together, the
“Deutsche Bank Group”) announced 2 days ago of Ceasing Substantial Holder for NCZ:ASX and then this morning a Becoming Subby announcement again.
NCZ dropped from 18c to 0.095 recently...
I'm hazarding a guess there's many more of these announcements around the traps?

I would love to be able to view and compare short trades charts against long trades.... might try getting the shorts report daily and chart it all somehow... is anyone any good at Excel macros?
Cheers.
F.Rock

F.Rock

 

[tinhat]

Look back at this thread and others here and I was all bullish bank stocks. Rah, rah! I'm only interested now in deploying my modest resources into companies I think might help transform our economy. No point investing in the dead. Leave that to scotty and his national extractive industry bedfellow country party up the farmer **** the land and the water mates. Might as well go live on the great barrier reef and start a coal min.

 

[qldfrog]

Might as well go live on the great barrier reef and start a coal min.

it is coalled (;-) QLd Bowen basin

 

[frugal.rock]

Starting to consider the financial sector may be underpriced.
Most of the individuals are still down 25% overall.
Many of the big banks have a stake in the BNPL sub sector, either by stock ownership or lending, or both.
If banks are slowly losing market share to BNPL companies, can we expect a few takeovers from the banking sector?
My thoughts are, maybe I should consider what the banks are investing in.
Some comparisons for my thinking;
Companies like Aldi and McDonald's invest considerable time and money looking for emerging areas (real estate) to setup in.
Am thinking it's only reasonable to consider what the banks are doing.
It's not in their interests for loans to become junk.
On a side note, the government has put tighter restrictions on banks lending, no doubt reducing junk debt further for the future.
I believe new loans are down considerably, but refinancing has gone up considerably.
My

F.Rock

 

[sptrawler]

A bit of recovery starting to happen in the banking space, I guess the penny is dropping that people are saving and also using government stimulus to build. So I have been nibbling away.

 

[BlindSquirrel]

I just can't bring myself to do it. Not with rock bottom interest rates and unlimited money printing.

 

[sptrawler]

I just can't bring myself to do it. Not with rock bottom interest rates and unlimited money printing.

Good points squirrel, but I just work on the theory, life goes on and most things like the banks return to long term average.
But as you say, still plenty of headwinds.

 

[UMike]

ANZ and WBC have had massive gains.

Probably pulled CBA and NAB up with them.

Missed the boat?

 

[dyna]

That boat has well and truly gone.Might have to change this thread's title.I got 10 grand worth of WBC in March at $15.40,$23.89 in February,worst of all,$24.40 way back in March 2019.MP at $24.37 today,so I'm just now breaking even.Boy,what bad timing.Won't be so gung- ho careless,next time.

 

[sptrawler]

The great thing is, these once in a lifetime events are happening much more often.lol

 

[spratty84]

ANZ and WBC have had massive gains.

Probably pulled CBA and NAB up with them.

Missed the boat?

Yep the boat has gone, i am grateful that i bought 80k worth of ben wbc nab anz back in march, it was good timing for me personally to kick start my portfolio off again.

 

[qldfrog]

Yep the boat has gone, i am grateful that i bought 80k worth of ben wbc nab anz back in march, it was good timing for me personally to kick start my portfolio off again.

probably a good opportunity to spend at the next pullback, we will have one, in anticipation of interest rate rising again

 

[spratty84]

probably a good opportunity to spend at the next pullback, we will have one, in anticipation of interest rate

probably a good opportunity to spend at the next pullback, we will have one, in anticipation of interest rate rising again

I will be waiting

probably a good opportunity to spend at the next pullback, we will have one, in anticipation of interest rate rising again

I will be keenly waiting

 

[Dona Ferentes]

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 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.

.........
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. 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.

- Glenn Dyer

 

[sptrawler]

NAB and WBC should be reporting soon, their results will be eagerly awaited, especially with the housing market going gangbusters.
Also WBC shouldn't have to give away another lazy $bilion, for poor management.

 

[sptrawler]

Well NAB report next, WBC seem to have come out of the woods, for now.

Westpac profit rebounds as home loans grow; retailer Premier to repay JobKeeper

Westpac's net profit more than doubles amid pandemic recovery. Premier Investments, owner of Smiggle and Peter Alexander, will return $15.6 million in JobKeeper funds to the ATO.

www.abc.net.au

 

[sptrawler]

Interesting article on the banks, it looks as though I may have finally scored a win.

A $30b bank buyback bonanza in store for investors

Banks are primed to hand back billions of dollars of excess capital to investors, in sharp contrast to last year when they were told to batten down the hatches.

www.smh.com.au

From the article:
In December, APRA’s Wayne Byres told the market that APRA had conducted a series of stress tests on the banks to gauge their ability to endure a bad crisis. This included a “severe downside scenario” where economic growth tanked 15 per cent, unemployment rose 13 per cent and house prices plummeted more than 30 per cent. The banks passed with flying colours, with APRA estimating such a crisis would result in a 5 per cent fall in the banks’ capital adequacy ratio to 6.6 per cent, which is still above the 4.5 per cent minimum requirement.

According to leading banking analyst Brett Le Mesurier who works at Velocity Trade, the banks are sitting on at least $30 billion in surplus capital available for capital returns.
He estimates that by September 30, ANZ will have $4.5 billion in excess capital, CBA $12 billion, NAB $5 billion and Westpac $8 billion. This doesn’t include ANZ and NAB’s latest buybacks.

Indeed, Le Mesurier believes the amount could be closer to $40 billion over the next two years on the basis the banks won’t grow much, they will write back bad debt provisions and Westpac sells more businesses.
In the case of Westpac and CBA, which have a combined $6.5 billion in franking credits, some of the capital can be returned in an off-market buyback that attaches franking credits to the capital return to provide local investors with tax-friendly buybacks.

“The outlook is positive for banks because home loan growth is likely to continue to increase,” Le Mesurier says.