Our view at Calnan Flack is get amongst the banks. Rather than kicking them while they are down, “BUY ‘em while they’re down”
Many punters and analysts are bearish on the banks. They just can’t see how they could possibly redeem themselves in the public’s eye.
But you know what – they don’t have to. ‘Cos if you want to borrow some serious money where are you going to go?
Sure, there has been massive growth in the FinTech space, but as it stands at the moment these companies are not going to make a dent on the banks. And if or when they do, you can bet your bottom dollar the banks will just buy them – and either use their technology, or just shelve it!
I never said the banks were nice.
But now is a great time to be adding banks to your portfolio!
Well maybe not NAB but there are some decent banking buys out there.
Mid Jan 2019, credit ratings agency Fitch downgraded its outlook for National Australia Bank, warning “that the need to deal with problems exposed by the Royal Commission could dampen shareholder returns.”
Both chief executive Andrew Thorburn and chairman Dr Ken Henry announced their resignations after Hayne’s report singled them out saying they had not learnt the lessons of past misconduct in its wealth management arm.
Its been a rough period for NAB and its certainly not one of our favourite banks, but I don’t foresee quite the doom and gloom many are predicting.
Meanwhile, Westpac’s first-quarter update recently revealed a 6.8% rise in cash earnings to just over $2 billion.
Want to know just how powerful and influential this sector is?
Well the Federal Government has backed away from the banking Royal Commission’s recommendation that all commissions in the mortgage broking industry be abolished.
“The abolition of trail from July 2020 won’t proceed as first announced,” Josh Frydenberg 14th March 2019.
Just days after the Royal Commission was publicly released a rattled Liberal party feeling the public pressure categorically said that “trail commissions on lending products will be terminated in 2020”. But the lobby groups have won and both sides of politics are now saying it’s not a recommendation they will be implementing…. No one said that political views were not fluid!
Don’t be fooled by the media. Or by the political posturing.
Each cycle is “Same Same, But Different” The banks and the credit they create will have an ENORMOUS impact and influence on this cycle.
The Bastard Banks are NOT dead.
But in fact, they are offering some terrific value and great opportunity in my mind.
So, in the immortal words of Ian “Molly” Meldrum, “Do yourself a favour” and buy some banks!
Oi, and don’t forget to vote……