Australia’s big four banks have dipped into a “bear market” as investors fret over multiple challenges including falling house prices, a regulatory backlash sparked by the royal commission, and higher funding costs.
Hugh Dive, chief investment officer at Atlas Funds Management, also thought the market had become too pessimistic towards banks.
He pointed out the flipside of weak credit growth was that banks had less need to set aside capital to support lending, which should underpin dividends.
“In a situation where credit is not really growing very fast, and they sold a lot of businesses, that’s going to return a lot of capital,” Mr Dive said.
Big banks in bear market on housing, royal commission jitters
By Clancy Yeates Normal text size Larger text size Very large text size Australia’s big four banks have dipped into a “bear market” as investors fret over multiple challenges including falling house prices, a regulatory backlash sparked by the royal commission, and higher funding costs.