Investors take note: The professionals think these two ASX bank stocks are the best

Is there value in National Australia Bank Ltd. (ASX:NAB) in 2015?

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Australia’s bank stocks, both large and small, have been terrific investments since the start of 2012. Macquarie Group Ltd (ASX: MQG) has been the best, returning over 110% before dividends, while the Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) have been close behind, returning nearly 60% each as well as over 20% in dividends.

2015’s Best Banks

Following another solid year in 2014, professional analysts reviewed their predictions for the big four banks in 2015. After being two of the poorer performing banks in 2014, analysts are relatively united in their prediction of National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) as the best value banks in 2015.

Admittedly, both have started the year fairly poorly, down 0.7% and 2.6% respectively, however this can be attributed in-part to the 2.2% drop in the S&P/ASX 200 (INDEXASX: XJO).

Why NAB & ANZ?

Analysts believe that low interest rates in Australia will support ongoing profit growth and housing sector growth, while it should also keep loan defaults at near-term lows. NAB’s recovery from the GFC has been significantly slower than rivals and analysts view 2015 as the year that it can finally throw away the remnants of some poor decisions in the lead up to the financial disaster. This could lead to a share price and earnings growth outperformance.

In addition, analysts expect the local housing market to remain strong, and for loan growth to remain strong at a rate of around 7% per annum. NAB’s heavy exposure to the local housing market, and ANZ’s exposure to the booming Asia economy via its subsidiaries offers investors the most attractive growth options.

The question must be asked however, what happens if the housing market pops? Australia’s big four banks are heavily exposed to the local market and investors should consider investing in companies with more room to move should things go wrong.

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Motley Fool contributor Andrew Mudie owns shares in does not own shares in any company mentioned. You can find Andrew on Twitter @andrewmudie

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