What we learned from the banks

Uday Cheruvu, Portfolio Manager at PM CAPITAL, has been paying close attention to developments at the domestic banks to assess the overall health of the Australian economy. “We feel that the small business side of the economy is much further ahead of the curve than what it’s been given credit for, and that’s likely to come through in the banks’ earnings. They’re not seeing an underlying, broad-based, macroeconomic deterioration.” He says the increase in bad debts is a result of one-off events, not the beginning of a larger trend, which bodes well for the banks’ balance sheets. In this video, he expands on his view of the investment case for the banks.