Whilst the maintenance of a minimum level of ROE is essential for any commercial bank, we would nevertheless see ROE as particularly important for the major banks in Australia, give that:
■ The major banks have positioned themselves as yield stocks in terms of one of their key investment attributes (and major bank dividend yields are indeed relatively high at 6.4%);
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
