Redemption? Sort of; but the way the share prices of Australian banks rebounded in the June half year was extremely helpful to super funds and self-managed funds and investors generally.
But even among the Big Four, there was a clear winner – the nastiest of them all – the Commonwealth Bank, with the best performance in the 2018-19 financial year and second so far in 2019 behind the ANZ.
After a year of adverse mentions at the Hayne Royal Commission, board and management clean out, billions of dollars in customer remediation and other costs, selling off unwanted, tricky assets and the AUSTRAC money laundering scandal, Australia’s biggest bank has emerged battered but still alive.
CBA shares were up 13.6% for the year to June 30 and 14.35% for the first half of 2019 when they closed at $82.78 on Friday. That’s after a 21 month high of $83.99 on Friday.
Most of the improvement came in the June quarter when the shares surged 17.2%, outperforming the ASX 200 which could only manage a solid 7.1% rise in the same period.
The CBA’s last quarter surge helped drag the ASX 200 higher – the index rose 6.85% for the year to last Friday (13.1% including dividends) and was up a very solid 17.22% for the first half of the year.
The CBA’s overall performance was clearly better than its three peers.
Westpac, the country’s second-biggest bank saw its shares slid 3.2% in the year to last Friday, a drop made to look better by the 13.2% jump in the six months to June 28 and a solid 9.4% gain in the June quarter.
ANZ shares also lost ground over 2018-19 – down a tiny 0.11%, but a loss nevertheless. But that loss was softened by a 15.3% gain in the first half of 2019 – with a very solid 8.3% improvement in the final three months of the financial year.
And NAB shares lost 2.5% for 2018-19, but the 11% year to date gain in 2019 and the 5.7% rise in the final quarter was an improvement and eased some of the pain for shareholders.
The January to June improvement was better than the losses in 2018.
Banks shake off Royal Commission gloom
The average rise for the big four so far this year was 13.6% and with the collective market value accounting for most of the 17.2% year to date gain for the ASX 200.
Westpac was the biggest victim – its shares losing 20% over the year to December, while NAB shares fell 18% and ANZ shares lost 14.9% in value. Westpac, ANZ and NAB shareholders all delivered first strikes against their bank’s remuneration reports at their annual reports in December.
Commonwealth Bank shares outperformed – its shares lost 9.9% in 2018 despite all that bad news- the AUSTRAC money laundering story, the disclosures at the royal commission and a reshaping of senior management. The CBA managed to escape censure from shareholders at its AGM in November.
And the other partner of the big four at the Hayne inquiry – the AMP had a miserable six months (making a rotten 18 months now). AMP shares fell more than 405 over 2018-19 and are down more than 135 so far this year.
The shares fell 2.3% in June, which trimmed the June quarter loss to just 0.95%. The shares closed at $2.12 on Friday and touched an all time low of $2 in late June. AMP shares rose 2.4% in the last week of June which pushed the shares into the green for the quarter. Well-timed.
