Bank Outperformance Ends, But Fear Not
11:32 AM
Banks no longer offer deep value, but despite headwinds brokers expect the sector to benefit from a broader economic recovery
-Earnings and dividends upgrades through 2021
-Regionals favoured over majors
-Dividend revisions significantly outpacing earnings revisions
By Mark Story
Banks outperformed the broader market by around 3.5% in March, bringing the year to date outperformance to 12%. Over the past six months, ANZ Bank ((ANZ)), up 58%, has been the clear outperformer, followed by National Australia Bank ((NAB)) and Westpac ((WBC)) both up around 43%.
Reflecting lower leverage to the recovery and the benefit of starting from a stronger position, without the need to raise equity during covid, Commonwealth Bank ((CBA)) has by comparison lagged (up 30%).