Complications from the Banking Royal Commission have pushed the share prices of major bank shares on the S&P/ASX 200 towards 52-week low levels. But big banks are a must-have blue chip in my mind, especially when their shares are down, and if you’ve got some cash to spare for banking shares right now these are the three I’d put my money towards. Australia and New Zealand Banking Group (ASX: ANZ) ANZ shares have been volatile of late, at $28.50 at the time of writing – a fair bit lower than the $30.22 they were worth at this time last year….
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Complications from the Banking Royal Commission have pushed the share prices of major bank shares on the S&P/ASX 200 towards 52-week low levels.
But big banks are a must-have blue chip in my mind, especially when their shares are down, and if you’ve got some cash to spare for banking shares right now these are the three I’d put my money towards.
Australia and New Zealand Banking Group (ASX: ANZ)
ANZ shares have been volatile of late, at $28.50 at the time of writing – a fair bit lower than the $30.22 they were worth at this time last year.
Investors cringed last week when news broke ANZ would be hit with civil penalty proceedings from ASIC over its continuous disclosure obligations.
But ANZ is defending the allegations and is focused on maintaining a strong balance sheet in challenging conditions, recently upping its variable home loan rates.
Goldman Sachs last week slapped a 12-month price target of $32.63 on the stock, which would be a nice earner for any investors who bought in sometime soon if it came to fruition.
Some may wish to wait for ANZ’s preliminary report due out next month and its annual report in November, but depending on what happens in between, the share price might have somewhat recovered by this point, minimising gains.
Commonwealth Bank of Australia (ASX: CBA)
I have held Commonwealth Bank shares for a long time and probably always will.
To me, they’re a solid blue chip stock whose health is indicative of the wider market as a whole, and if the Commonwealth Bank ever collapsed I think we’d all have far larger problems to contend with than worrying about how much our portfolio had suffered.
In saying all of that, the Commonwealth Bank is not infallible, and it has suffered from some bad press this year – dipping down to a 52-week low in late June and sitting in the red at $71.76 at the time of writing.
Brokers like Morgans have maintained a positive outlook on Commonwealth Bank shares amid some industry turmoil this year and few complain about its dividend reliability.
But those seeking more specific financials will need to wait until February 2019 for its interim report so those buying in now would have to be comfortable with where the last financial report left off.
My colleague Tristan Harrison wrote about the likelihood Commonwealth Bank and its peers would step back from SMSF lending in the near future to reduce its risk levels, but any such discontinuation would also see the institution lose billions of loan dollars, which might not look so good for the books.
If I was looking for a big bank buy I would keep any eye on Commonwealth Bank at present, as if it sinks much lower it will be hovering in bargain territory in my books.
Westpac Banking Corp (ASX: WBC)
Westpac Banking Corp shares are down near 52-week lows right now, sitting at $28.02 at the time of writing.
Westpac has recently lifted mortgage rates and this week announced it would launch a voice payment platform, which will likely appeal to millennials who have many decades of banking left ahead of them for Westpac to leverage off.
Similar to ANZ’s move to increase variable interest rates, any uptick makes things harder on borrowers, but will bolster Westpac’s bottom line.
Westpac is certainly working hard to offset its share price slump this year and its share price may not stay at this level for long, so if you are thinking of buying in, the time may be nigh.
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Motley Fool contributor Carin Pickworth owns shares of Australia & New Zealand Banking Group Limited and Commonwealth Bank of Australia. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.