The very large value dispersion between Aussie banks continues, with CBA trading at a premium to both domestic and international peers, arguably, unjustified, to our mind.


We continue to prefer the highly similar, yet markedly cheaper, ANZ and WBC, having switched out of NAB recently on valuation grounds.

By highly similar, we’d suggest the below (gearing)…

By NSF ratios…

Sticky deposit holders…

By credit quality…

On a variety of frames…

So, not identical, but fairly highly correlated, both by share price performance, and by operating performance, and if you are there for a common macroeconomic component (higher interest rates) you probably want the ones that are slightly cheaper (acknowledging that they might be slightly lower quality) and assuming that the ex-ante return is more favourable, given broadly the same set of risks, over a similar time frame (i.e. the short run, in which higher rates lead to better banking profits, but haven’t yet triggered a meaningful rise in bad and doubtful debts).

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

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

General Advice Warning: This document has been prepared without taking into account your objectives, financial situation or needs, and therefore you should consider its appropriateness, having regard to your objectives, financial situation and needs. Before making any decision about whether to acquire a financial product, you should obtain and read the relevant Product Disclosure Statement (PDS) or Investor Directed Portfolio Service Guide (IDPS Guide) and consider talking to a financial adviser.

Taxation warning: Any taxation considerations are general and based on present taxation laws and may be subject to change. Aequitas is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and investors should seek tax advice from a registered tax agent or a registered tax (financial) adviser if they intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.

Receive our investment insights

Something went wrong. Please check your entries and try again.