Where are we in the banking cycle?

Livewire Exclusive

Global banks have formed a cornerstone part of PM Capital’s strategy as they’ve taken the #1 ranking in their category in the Morningstar survey over five and eight years. Following the election of Donald Trump, the Nasdaq Global Bank Index is up over 15%. So, has all the easy money been made? Paul Moore, Chief Investment Officer of PM Capital, explains his view.

“People now accept the fact that were in a period where banks can start to grow their earnings… We’re now firmly in the third quarter”

Key points:

  • Trump has made people realise that higher growth and higher rates are on the cards
  • Banks are prime beneficiaries of Trump tax cuts. BofA could see earnings growth of 30%
  • Markets always underestimate how much earnings can grow once they enter an upgrade cycle
  • Dividend growth story is only starting to get on people’s minds
  • Higher US rates could impact the mortgage books of local banks
  • Recent buyers of property in Australia are overleveraged and markets are underestimating this risk

About this contributor

Livewire Exclusive

Livewire Exclusive

Livewire Exclusive, Livewire

Livewire Exclusive brings you exclusive content from a wide range of leading fund managers and investment professionals.

Expertise

australian banks ASX:ANZ ASX:CBA ASX:NAB ASX:WBC Global banks

Comments

Please sign in to comment on this wire.