The recent global banking chaos has put investors, regulators, and governments on guard. Australian banks are no exception.
ASX-listed banks National Australia Bank Ltd. (AU:NAB) and Australia and New Zealand Banking Group (AU:ANZ) had a rough month in their share prices. However, their strong balance sheet, higher interest income, and stable dividends make them a safer option for investors.
While focusing on a particular sector in any market, TipRanks tools could be of good help to investors. The Top Australia Bank Stocks comprise all the major banks in the market with details on different parameters like dividends, earnings, technical analysis, and more.
Let’s discuss these banks in detail.
National Australia Bank Limited
NAB is among the top four largest banks in Australia, serving more than 8 million customers.
NAB’s stock has been trading down 8.6% in the last month, with around a 2.5% fall in the last five days. This was despite the bank posting higher profits in its first quarter for the fiscal year 2023. The cash earnings were up by 17.8% to AU$2.15 billion. The bank’s performance was supported by a higher net interest margin (NIM), which offset the tough environment for the lending business. The NIM increased by 12 basis points to 1.79%.
Post-update, analysts have mixed reviews on the stock. Brokerage firm Jefferies isn’t so convinced about the stock and reiterated their Sell rating.
On the other hand, Goldman Sachs remains bullish, with the highest price target of AU$35.60 suggesting an upside of 31.5%. Analyst Andrew Lyons stated that the quarterly results were “better than expected performance” and were well-supported by high revenues and lower bad debts.
What is the Prediction for NAB Shares?
According to TipRanks’ analyst consensus, NAB stock has a Moderate Buy rating.
The average target price is AU$31.36, which is almost 16% higher than the current price level.
Australia and New Zealand Banking Group Limited (ANZ)
Similar to NAB, ANZ’s stock has also been trading down by 8.9% over the last month. The favorable first quarter update for 2023 from the bank was not able to please investors, and the stock continued on the downward road.
However, analysts believe the recent decline makes the stock more attractive for passive income. In 2022, the bank paid a final dividend of AU$0.74 per share. According to Commsec, the expected dividend for ANZ is AU$1.60 per share in FY2023, which could go to AU$1.64 in FY2024.
Another bullish aspect of ANZ is its growing interest income. In 2022, the bank posted a net interest income of AU$14.9 billion. The bank is targeting another AU$1.5 billion of net interest income in 2023 and AU$3.2 billion in 2025.
ANZ Share Price Target
ANZ stock has a Moderate Buy rating on TipRanks, based on four Buy, and three Hold recommendations.
The average price target is AU$28.07, which is 24% above the current price level.
Recently, Australian regulators have come out in support of the local banks and have termed them safe. The Reserve Bank of Australia (RBA) said, “Australia’s banks are unquestionably strong.” The RBA believes these banks are well-capitalized and have solid liquidity, which puts them in a good position to withstand the current volatility.
Overall, both NAB and ANZ have Moderate Buy ratings from analysts.