No major uptick in bad debts for the big banks
In a recession scenario, bank earnings and dividends would come under pressure, however, we believe a recession is unlikely to occur in the foreseeable future. Within the sector, bank P/Es are trading in a wide range (between 10 – 14x earnings) reflecting some company specific earnings risk for the cheaper banks (e.g. Asian exposure risk for ANZ Bank). The mortgage-focused banks such as Westpac, Commonwealth Bank and Bank of Queensland look good at the moment with P/Es that are attractive combined with a favorable business mix.
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Simon joined Cadence Capital in 2013 as a Portfolio Manager. Prior to joining Cadence, Simon was a Portfolio Manager at Platypus Asset Management for 8 years. After completing a Bachelor of Engineering (Chemical) (Honours), Bachelor of Commerce...
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