Banks year-end: forecast dividend growth slows

Alex Pollak

Loftus Peak

On Wednesday of next week, three of the four major banks will rule off their books for the year. Around four weeks later, they will announce results. Consensus dividend growth for the coming year from the 15 brokers covering the banks ranges from 0% (NAB) to a high of 2.14% (WBC), with CBA (1.44%) and ANZ (1%) in between. This is a slowdown on the growth over the past few years. The last time all the four major banks cut dividends was 2009, post GFC. In CBA’s case, the final fell from $1.53 to $1.15, a drop of 24.8%. ANZ’s final dividend in the same year fell the same amount percentage wise, as did NAB’s, while WBC dropped 17%. This is simple cyclical stuff, and not problematic - times get tough so earnings growth stalls or falls, and dividends with it. But it isn’t just a cyclical story. It’s structural for two reasons - digital disintermediation being the first. And just as important, it’s the way that APRA regulation is playing into that disintermediation. Read the full article here (VIEW LINK)

CIO of Loftus Peak, a specialist global fund manager with a track record of successful investment in some of the world's fastest-growing listed businesses.

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