NAB Bank
Just curious why was the NAB your least preferred bank? What was the rationale for it being the least preferred? Kind regards Mark
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Answer
Hi Mark,
We covered our decision to cut NAB in detail in Wednesday’s morning report, a couple of salient points were:
- We think more investment and a stronger focus from the likes of CBA towards business banking will hurt NAB from a relative standpoint.
- NAB trades on 15.4x 1 year forward PE making is over 1 standard deviation ‘expensive’, or about 15% above average.
- However, ANZ which we held, trades on 12.2x, 1 year forward PE , which is only 2% above its usual multiple.
Banks have enjoyed a phenomenal period, and in the short term at least, taking some profit and increasing flexibility made sense to MM, with the increased competitive landscape towards NAB’s very important business banking dominance the key reason it was singled out.
