Bank share hit bargain levels
Bank shares fell yesterday following the Commonwealth Bank's profit announcement and are now at their cheapest since early 2000 and the “tech-wreck”. CBA shares were down 6.9 per cent to $46.20 after the bank confirmed that its funding costs were up by $100 million and that it had to sharply increase bad credit provisions. The news prompted investor concerns about the health of the banking sector, driving the St George share price down 6.9 per cent to $25.52, NAB lost 5.6 per cent to $30.40, Westpac fell more than 4 per cent to $23.25 while ANZ was down 5.9 per cent to $23.80. Bank shares were trading at 15 times earnings only a couple of months ago but, assuming 2 to 3 per cent is cut from the CBA's full-year profit expectations, the sector will be trading at a price-to-earnings multiple of around 11 per cent.
Source: The Australian