Summary: Macquarie says Australian bank stocks are trading at earnings multiples not seen “in years” and predicts stock-pickers will be drawn to the banks over the next few weeks for the dividends. UBS also remains upbeat, with the caveat that Australia doesn’t slip into a deep recession. But Morgan Stanley warns of the prospect of rising loan losses, higher funding costs and dividend cuts.
Key take-out: Through Australia’s good times the country’s banks were market darlings. They now need to show they’ve got what it takes to muscle through the bad times.
Key beneficiaries: General investors. Category: Bank shares.