Lots of SMSF investors tend to buy shares in all four of the big banks. Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) may all be good businesses but I think buying all four is overkill.
Here's why NAB is my favourite bank:
Ahead of the curve
NAB strikes me as a business that is always looking to improve and wants to work with the future winners of Australia.
I have been impressed by NAB joining up with technologically advanced ASX businesses like Xero FPO NZX (ASX: XRO), Afterpay Touch Group Ltd (ASX: APT) and REA Group Limited (ASX: REA).
It's taking actions like this that will stop the business becoming a dinosaur like some of the other banks are in danger of becoming.
Doing the right thing by shareholders
It's hard to admit when the business made an error and then make big moves to correct that.
To me, I think NAB made the right choice by divesting its problematic businesses in the UK and the USA which were caught up in the banking scandals like all the other banks in those countries.
I'd want management who can make those big calls at the head of my bank investment.
Making the right moves for customers
NAB CEO Andrew Thorburn has said that no branch manager, assistant branch manager or team leader in a NAB call centre will have product based incentives from the 1st October.
When a bank can recognise that how you reward staff motivates them to act a certain way, it will be a good choice for the long-term satisfaction and loyalty of clients.
Foolish takeaway
NAB is currently trading at 13x FY18's estimated earnings with a grossed-up dividend yield of 8.71%.
It's my favourite of the big four banks and it would be the one I'd pick if I had to invest today. However, I'm not a buyer at today's price because if the economy does indeed suffer in a year or two, I imagine NAB's share price could materially fall.
