Is it a good time to buy anz shares

For full functionality of this site it is necessary to enable JavaScript. Here are the instructions how to enable JavaScript in your web browser. Bank bashing has always been a popular sport in Australia but has been a vintage year, with every political clown in Canberra attacking the companies that are the cornerstone of many Australians' superannuation schemes.

Shaw and Partners tried to inject a little sanity into the debate last week by pointing out that the Australian banks are highly efficient by world standards. Shaw calculated that the average return on equity ROE for the eight largest Australian banks averaged One of the most critical performance figures for any bank is its net interest margin, the difference between the interest it earns and the interest it pays.

The net interest margin for the Australian banks averaged a rather skinny 2. This leads to the conclusion that the better ROE performance in Australia is actually due to our banks having significantly better cost control. The cost-to-income ratio of Australian banks is 44 per cent, against per cent in the UK and US. It's gratifying to know our banks are so efficient, probably aided by their branch networks, which are large by international standards. This wouldn't have been much help to investors, however, because the share market performance of our top eight banks in has differed widely.

Four of them are currently down on their opening prices while four are up although ANZ Banking Group and Bendigo and Adelaide Bank are only marginally higher. At its worst, in early November, Bank of Queensland was down 27 per cent.

Westpac Banking Corp, Clydesdale, National Australia Bank and ANZ all hit their lows in February, when fears were at their height that the Australian Prudent Regulation Authority was about to impose further capital requirements.

Those fears have now retreated because the proposed Basel IV tightening is unlikely to be severe , possibly because the authorities are aware that many European banks are fragile, most notably Deutsche Bank.

The good news is that shares in all eight Australian banks have been on the rise over the past three weeks. Whether theses runs will continue is doubtful because all of them appear to be approaching full value. All eight banks are now trading on price multiples around the 12 times to 13 times earnings range, which is about where banks should be. Mystate is the lowest on The yields are still handsome. Apart from Clydesdale, which has only just returned to the dividend list, the other seven are all yielding in the per cent range.

CBA is the lowest on 5. These are good returns in a low interest rate market.

ANZ - Australia and New Zealand Banking Group Limited | TopStocks ASX Forum

The question is what is likely to happen to their share prices and yields if interest rates should rise? Well any rises are likely to be gradual. Interest rates went down in steps of one quarter of one per cent 25 basis points and will most probably return when they return in similar steps. All things being equal which admittedly they never are the Australian banks should be able to hold their dividends and payout ratios for the foreseeable future.

Further substantial share price rises are unlikely unless the whole market starts running. Bank share prices have fluctuated wildly over the past year, but now seems a good time to buy them without losing sleep at nights.

They were better buys a month ago, but we're all market geniuses in hindsight. Trevor Sykes has interests in five of the eight banks. He is not a licensed investment advisor. Views expressed in this column are not a substitute for tailored investment advice.

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My Saved Searches 0 Done Select all Delete. Home Personal Finance Shares. Dec 5 at 8: Louie Douvis by Trevor Sykes Bank bashing has always been a popular sport in Australia but has been a vintage year, with every political clown in Canberra attacking the companies that are the cornerstone of many Australians' superannuation schemes.

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