Andrew Martin, Portfolio Manager at Alphinity, argues that although banks might be considered fair-value - investors could be underestimating the effect of increased competition, which has surged since the GFC. For a long time coming out of the GFC the banks had very little competition at all, so they took a lot of market share and they re-priced their products (like mortgages). But that time is certainly over, there is competition now right across the board. There's more liquidity around, more ability for people to fund lending and certainly the small area of credit growth in the market, which is mortgages, has seen a lot of competition. There is some relief from lower funding costs, but that's really just getting plowed back into competition on the lending front. Watch the video here: (VIEW LINK)
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