On Friday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) closed the day a fraction higher at 6,066.1 points.
This small gain means the benchmark index has pushed an impressive 3.3% higher since the start of the month.
Whilst this is certainly strong, three of Australia's big four banks have smashed this return thanks to a better than expected Royal Commission final report.
How have the banks performed in February?
The Australia and New Zealand Banking Group (ASX: ANZ) share price has climbed a sizeable 6% month to date. Following the Royal Commission final report, analysts at Goldman Sachs retained their buy rating and $29.58 price target on the bank's shares. Which could mean there's still decent upside for its shares even after this strong run.
The Commonwealth Bank of Australia (ASX: CBA) share price is up 1% this month, but this is due to its shares dropping lower after trading ex-dividend for its $2.00 per share interim dividend last week. If you take this out of the equation CBA's shares would have provided a return of 4.1% so far in February. Earlier this month Australia's biggest bank reported its half year results and revealed cash NPAT from continuing operations of $4,676 million, up 1.7% on the prior corresponding period.
The National Australia Bank Ltd (ASX: NAB) share price is the only one of the big four underperforming the market this month with a gain of 1.5% month to date. Though, this is not overly surprising given how the bank's CEO and chairman both resigned after being singled out for criticism in the Royal Commission report.
The Westpac Banking Corp (ASX: WBC) share price has been the best performer of the big four with a month to date gain of 6.7%. The bank's shares have achieved this despite being downgraded by analysts at Ord Minnett earlier this month. According to the note, the broker downgraded Westpac's shares to a hold rating after CBA's half year result demonstrated that retail banking conditions remain tough.
Which bank share should you buy?
While at current prices all the banks could arguably be buys, my preference remains ANZ.
As I've mentioned before, the reason for this is that I believe its strong business lending presence and cost cutting opportunities means it is well positioned for growth despite the difficult trading conditions. Another bonus is that it offers a trailing fully franked 6% dividend yield.
