This good, via UBS:
Australian Banks Have Outperformed Global Banks & The Australian Market
The absence of a domestic recession for more than 25 years, alongside a progressive decline in interest rates, has created a fertile backdrop for Australian banks to significantly outperform both global banks and the broader Australian market. Bank earnings have been relatively stronger and relatively less volatile than both global banks and the broader Australian market.
However, Headwinds Are Building
1/ Housing seems to be peaking, 2/ additional macro prudential requirements on “interest only” lending has allowed banks to re-price their way to some short-term margin widening but it will also likely slow credit growth medium-term, 3/ the major bank “liability levy” is expected to cause a 4-5% hit to earnings (assuming no pass through via re-pricing) and 4/ bad debts continue to be very low but the medium-term risk on provisioning is skewed to the upside in our view.
Banks A “Market Performer”
At Best From Here Banks appear a “market performer” at best from here, although still benign domestic macro conditions and the “relative appeal” argument suggest against being overtly bearish right now. However, headwinds and clouds seem to be accumulating. We see better value in resources and selected industrials.
That out-performance is based purely upon successive Australian governments refusing to price guarantees and supporting the house price bubble at every turn.
Stop whining.