Hi Andrew,
The 2 Australian regional banks have endured a very tough few years in very similar fashion to their US peers although without the panic sell off when the likes Silicon Valley Bank (SVB US) and Signature Bank (SNBY US) went broke in March. The local regionals have faced increased competition plus higher wholesale funding costs which have made them very cheap on a historical basis but not necessarily overly exciting.
Bank of Queensland (BOQ) $5.93 – this QLD based bank has bounced along with its global peers from its 2023 lows but were not convinced its out of the wood – another test of $5 wouldn’t surprise if trading conditions deteriorated. Scale is being more and more important in banking, and BOQ simply doesn’t have it.
Bendigo Bank (BEN) $9.20 – VIC regional has noticeably outperformed BOQ only falling -6.1% in 2023 compared to the latter which has tumbled -14.1%, over the same time period ANZ is up +6.7%. We have no current plans to “stalk” BEN but it will look interesting from a technical perspective under $9.
Lastly you mentioned Virgin Money (VUK) which indeed has been upgraded following the BoE stress test, we do like it but the risk/reward is now pretty average as it approaches $3.50.
See you in early September for the ride – I still don’t know how the change a postie bike tyre!
