The “Big Four” Banks

Hi Debbie,

We’re more inclined to switch between banks when relative valuation discrepancies open up more than usual, rather than for upcoming dividends. CBA tends to outperform in periods of uncertainty/volatility as we’ve seen through March as money chases safety. In March for instance, CBA is down 2.2% relative to ANZ down 6.75%, NAB off 5.7% and WBC -4.3% – so a decision to switch from CBA to the others would more be around performance differentials than upcoming dividends. If these open up more, then it’s would be worth considering.  On a one year view, CBA has now outperformed ANZ by nearly 6%, though NAB & WBC have been the clear winners in the sector, taking over from ANZ which had that mantle until more recently.

Overall, higher rates should benefit bank margins unless we get a significant economic slowdown leading to increased bad debts – the local economy looks ok at the moment, but the Iranian conflict could wash through the economy over the coming few quarters if rates move materially higher (not our expectation).

• Coming into the weekend the futures markets are pricing in two 0.25% RBA hikes before Christmas with a 60% chance of a third, a tough festive season could be looming for many with mortgage and fuel costs rising together.

In terms of the 3 banks trading ex-dividend in May:

• ANZ remains our preferred bank, aided by its ~4.5% part-franked yield although a pullback to sub $35 wouldn’t surprise but obviously this might be post its ~85c dividend.
• NAB is forecast to pay an 85c fully franked dividend in May, ~3.7% yield before franking, a test of the $44-45 area wouldn’t surprise but it remains firm.
• WBC, our second favorite bank, is forecast to pay an 80c fully franked dividend in May, ~3.8% yield before franking, a test of the $38-39 area wouldn’t surprise but it looks good into dips.

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Bank Performance – Source Bloomberg

LAST UPDATED 21/03/2026 07:41

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Bank Performance – Source Bloomberg

LAST UPDATED 21/03/2026 07:41