Financial inquiry poses risks to big four banks

Livewire Equities


Financial inquiry poses risks to big four banks. Matt Williams, the Head of Equities at Perpetual says you've got to be careful of the banks (talking on Sky Business). They've really squeezed that lemon hard. Bad and doubtful debt charges are quite low. The price-earnings ratio's that you're buying the banks on looks about 12 times right now. If you look over an economic cycle you're paying more like 15-16 times. So you've got to be cognizant of that. Regarding the upcoming financial system inquiry and its impact on the big four, Williams says The Banks collectively make almost $30BN in profits this financial year. That's a fairly hefty number in an economy of 24 million people. I think there's probably more risk (to the Big Banks) in the inquiry than opportunity, on balance.

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