FEAR & GREED | Business News Q+A: Bank stocks have changed. Here's what it means for investors.
Dec 4, 2025
Andrew Dale, a partner at ECP Asset Management, shares insights on the evolving landscape of bank stocks in Australia. He explains why investors favor banks and the recent divergence in their performance since the Hayne Royal Commission. Andrew contrasts the strengths and weaknesses of the big four banks, and discusses strategies for choosing bank exposures based on individual investment objectives. He emphasizes the importance of quality in investment choices moving forward and evaluates the prospects of regional lenders, highlighting their unique challenges.
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Banks Are Unavoidable Household Stocks
- Australian banks are household-name stocks that retail investors find easy to understand and hold.
- Their large market weight makes them unavoidable in equity portfolios.
Big Four No Longer Move As One
- The big four now have distinct business exposures driving diverging performance.
- Commonwealth Bank stands out for retail scale while others follow different turnaround or institutional stories.
CBA’s Simple, Deposit-Led Edge
- Commonwealth Bank's outperformance came from simplifying and banking customers more deeply.
- A large deposit base gave it cheaper funding and better margins.