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Highlights
- Today, the benchmark index ASX 200 closed 0.45% lower at 7,206.30 points.
- All eyes are set on the RBA meet scheduled for tomorrow (7 June), where the central bank is expected to announce a hike in interest rates for the second time this year.
- The shares of four ASX-listed banking majors-- Macquarie Group Limited, Commonwealth Bank of Australia, Westpac Banking Corporation, and National Australia Bank Limited – ended in the red today
The Reserve Bank of Australia (RBA) is all set to raise interest rates for the second time this year tomorrow. All eyes are set on the RBA meet scheduled for tomorrow (7 June). Unabated inflation has become the biggest concern not only for policy makers in Australia but also for the entire world. Interest rates are mainly raised to bring down credit offtake and inflation.
Last month, for the first time in more than a decade, the RBA decided to raise the official cash rate. In May, the benchmark interest rate was hiked by 25 basis points from the historic low of 0.10% to the existing 0.35%.
Australia's inflation figures surged to 5.1% in the first quarter of 2022, surpassing market estimates of 4.6%. Meanwhile, new Federal Treasurer Jim Chalmers has indicated that inflation is expected to move higher, thus putting pressure on the Australian central bank for additional interest rate hikes.
Among leading local banks, CBA and NAB anticipate a 25bps hike on Tuesday, whereas ANZ and Westpac are expecting a 40bps hike.
A possible rise in interest rate is expected to impact credit offtake of these banks negatively but their net interest margins are expected to rise. In this backdrop, let us see how major Australian banks performed today ahead of an expected rate hike tomorrow. This article will look at four-ASX listed banking stocks and gauge their performance in the last 12 months. The four banking stocks include Macquarie Group Limited (ASX:MQG), Commonwealth Bank of Australia (ASX:CBA), Westpac Banking Corporation (ASX:WBC), and National Australia Bank Limited (ASX:NAB).
When it comes to the overall performance of the financial sector, the S&P/ASX 200 Financials Index (XFJ) closed 0.581% lower at 6512.00 points today. Meanwhile, the broader market closed lower as the benchmark index ASX 200 fell 0.45% to close at 7,206.30 points.
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Macquarie Group Limited (ASX:MQG):
Today, the share price of the ASX-listed financial services group closed 0.619% lower at AU$182.90 per share on ASX. In the last one year, Macquarie Group shares have gained almost 19.16%, while the stock is down 13.46% on a year-to-date (YTD) basis. The company commands a market capitalisation of AU$70.62 billion. Macquarie Group Limited is expected to pay a final dividend (40% franked) of AU$3.50 per share on 4 July 2022.
Commonwealth Bank of Australia (ASX:CBA):
The shares of ASX-listed financial services provider Commonwealth Bank of Australia closed 0.494% lower at AU$104.680 today. CBA has a market capitalisation of AU$179.51 billion. In the last one year, the share price of Commonwealth Bank of Australia has gained almost 2.70%, while the stock is up roughly 2% YTD.
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Westpac Banking Corporation (ASX:WBC):
Shares of ASX-listed banking giant Westpac Banking Corporation closed 0.333% lower at AU$23.920 on Monday. Westpac Banking Corporation commands a market capitalisation of AU$84.02 billion. The company is expected to pay an interim fully franked dividend of AU$0.610 on 24 June 2022.
Last month, Westpac and BT Funds Management Limited (Trustee) entered into a Heads of Agreement to merge, through a successor fund transfer (SFT), BT's personal and corporate superannuation funds with Mercer Super Trust. Besides, Westpac has signed an agreement to sell its Advance Asset Management business to Mercer Australia.
In the last one year, Westpac shares have fallen almost 10.18%, while the stock is up by nearly 10.43% YTD.
National Australia Bank Limited (ASX:NAB):
The shares of National Australia Bank Limited closed 0.543% lower at AU$31.110 apiece on ASX in today's trading session. National Australia Bank Limited commands a market capitalisation of AU$100.40 billion. NAB's share price has gained nearly 17% in the last one year, while the stock is up almost 6% YTD. The financial services provider is expected to pay a fully franked interim dividend of AU$0.730 on 5 July 2022.
Today, NAB has announced the Offer of a new Additional Tier 1 Capital security, NAB Capital Notes 6, which is likely to be quoted on ASX (Offer). The Offer is anticipated to raise $1 billion. NAB also stated that it would redeem NAB Capital Notes 2 (NCN2) (~$1.5 billion) on 7 July 2022.