- The benchmark index S&P/ASX 200, along with all major sectors in the red zone on Monday (22 August 2022).
- The Financial sector was one of the poor performing sectors as it lost 76.4 points at the end of yesterday’s trading session.
- This article features the big four Australian banks- ANZ, CBA, NAB, and WBC; and their respective performances on the ASX.
The Australian ‘big four’ banks are referred to as the four most dominating organisations in the banking sector in terms of market share, assets, revenue, and market capitalisation. These four banks are:
- Australia and New Zealand Banking Group Limited (ASX:ANZ)- having a market capitalisation of AU$66.06 billion.
- Commonwealth Bank of Australia (ASX:CBA)- having a market capitalisation of AU$168.38 billion.
- National Australian Bank Limited (ASX:NAB).
- Westpac Banking Corporation (ASX:WBC)- having a market capitalisation of AU$77.65 billion.
Today, the financial sector has opened in red on the ASX. In fact, majority of the significant sectors under the S&P/ASX 200 index have opened lower on Tuesday (23 August 2022).
The S&P/ASX 200 Financial sector (INDEXASX:XFJ) was spotted at 6,188 points, down 86.8 points or 1.242% as of 10:49 AM AEST. Meanwhile, the S&P/ASX 200 Banks (INDEAXSX:XBK) was spotted at 2,537.7 points, down 25.8 points or 1.006% as of 10:49 AM AEST.
In this article, we have mainly explored the Australian big four banks and have analysed their respective performances on the ASX.
Australia and New Zealand Banking Group Limited (ASX:ANZ)
Australia and New Zealand Banking Group Limited (ASX:ANZ) shares closed marginally lower at AU$22.840 per share on the ASX on Monday.
ANZ’s share price has fallen over 18% on the ASX in a year. On the other hand, ANZ’s YTD-based share price came down by almost 18% by the end of Monday’s trading session on the ASX.
Recently Australia and New Zealand Banking Group announced that it has successfully completed the retail component of the Entitlement Offer. As per ANZ’s Retail Entitlement Offer, the bank was supposed to raise approximately AU$3.5 billion of new ANZ shares.
The bank has already completed the institutional component of the Entitlement Offer earlier on 20 July 2022 and raised about US$1.7 billion.
Commonwealth Bank of Australia (ASX:CBA)
Image source: © Esmehelit | Megapixl.com
Commonwealth Bank of Australia (ASX:CBA) shares closed 1.05% lower at AU$98.9 per share on the ASX on Monday.
In a period of the last 12 months, Commonwealth Bank’s share price declined slightly by 1.21% on the ASX. On the other hand, Commonwealth Bank’s YTD-based share price marked a loss of 3.46% on the ASX (as of 22 August 2022).
Commonwealth Bank is currently focused on its share buy-back program. Share buy-back is a healthy practice in business that represents the good health of a firm. It indicates that the company is confident in itself and that it is safe to invest in the business.
National Australia Bank Limited (ASX:NAB)
The shares of National Australia Bank Limited (ASX:NAB) closed trading in the red territory on Monday. National Australia Bank’s shares closed 1.228% down to AU$30.54 per share at the end of Monday’s trading session on the ASX.
National Australia Bank’s share price has marked a gain of 11.5% on the ASX within the last 12 months. Moreover, National Australia Bank’s YTD-based share price appreciated almost by 4% on the ASX on Monday.
Last week, National Australia Bank Limited shared an update regarding its share buy-back strategy. The bank stated that it had bought a total of 135,577,556 shares of its own until the last day.
Westpac Banking Corporation (ASX:WBC)
Image source: © Sunflowerey | Megapixl.com
Just like the shares of other big four Australian banks, Westpac Banking Corporation (ASX:WBC) shares have also closed in the red zone today. Westpac’s share price stood at AU$21.8 per share after marking a loss of 1.713% by the end of Monday’s trading session.
Over the last 12 months, Westpac’s share price has declined almost by 15% on the ASX. On the contrary, Westpac’s YTD-based share price gained slightly by 0.65% on the ASX.
Is investing in banking stocks a good option?
Investing in the stock market has its own pros and cons. With the right amount of knowledge, research and expertise, stock market investment can be very profitable to some people. However, it is also true that stock market investments involve a lot of risk factors.
As far as the banking sector is involved, experts believe that banking stocks could be an excellent option for long-term investment. However, being a part of the financial sector, these stocks remain most vulnerable to inflation, recession, etc.
This is because the primary operation of a bank is to earn interest by lending money to its customers. However, during the time of inflation, a sharp rise in commodity prices can be witnessed. Therefore, people no longer prefer taking loans from banks at that point in time.
Furthermore, banks also increase their interest rates during inflation to sustain their business, which is yet another reason why customers do not prefer taking loans during inflation.