Company result

We’ve tended to prefer the well capitalised larger banks, relative to the smaller banks. With much of the country in lockdown, bigger equity buffers strike us as better to have, than not.

BEN’s ROE bounced back to ~10%, a marked improvement off the COVID impacted era..

…but we’d suggest that was already in the price. The cash NPAT result ($457m, vs $464m expected) was a modest miss, but given the shares had a) recovered sharply and b) priced somewhere between fair-to-fully valued. As such, the stock has traded off sharply today (down ~10% at time of writing).


The NIM has continued to grind lower (2.23% 2H2021, vs 2.37% 1H2020), which reflects the ongoing competitive environment, and we continue to see the outlook for additional loan growth as challenged. We’d have held that view before 2/3rds of the country went into lockdown, but are only strengthened in our conviction subsequently.

We prefer to maintain an underweight to the banks, given these reasons, and to hold ANZ and NAB, rather than the regionals (also viewing CBA as overvalued post the run to $110, hence our exit).

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Please note that past performance is not a reliable indicator of future performance.

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