Banks trading at 1x book with a very sizeable NIM tailwind, with the tightest labour markets seen in decades. Surely not everyone defaults in the next 5 minutes.
We’ve got ANZ and WBC reporting shortly, so we’ll get to see if our views here are correct.
No call to action, just reflecting on our exposures. We’ve found it hard to buy other sectors, given our belief that the banks will hoover up all the spare income floating around the economy through higher mortgage rates (paraphrasing our views mightily).
CBA of course still looks very expensive, as does NAB. VUK, if you believe the UK doesn’t completely implode, looks very interesting (not for the faint-hearted, perhaps).
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