There aren't many banks in the world that are bigger than 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).
One of the world's biggest banks, HSBC, wants to significantly expand in the Australian home loan market. The bank generated a profit before tax of US$19.9 billion in 2018, so it's a business with a lot of firepower.
According to the AFR, HSBC wants to entice borrowers for property with low rate mortgages. Its current home loan rate was reduced to 3.59% in 2018 and it has nearly 1% of the Australian home loan market.
HSBC is also expanding its branch network at a time when the major banks, particularly ANZ and NAB, are reducing their workforces and branch numbers. The London and Chinese bank has been focusing on Sydney and Melbourne, with the HSBC branch network expected to reach 40 by the end of this year.
The international bank was not actually called before the Royal Commission, with the big four banks and AMP Limited (ASX: AMP) facing most of the heat. So it doesn't face the current reputation problems that some of its competitors do.
ASIC and APRA are going to be breathing down the necks of the big four banks after Commissioner Hayne criticised the regulators. Higher capital requirements also make it harder for the big banks to maintain the level of profitability of the past. A falling house market could put a big dent in the banks' earnings. It's tough being a bank at the moment.
Foolish takeaway
It's hard to pick a winner out of the big four banks. NAB is the cheapest, has the biggest dividend and a new set of management so it could be the best one to own in those terms. However, I'm drawn to Westpac for its large dividend and long-term history. But I personally wouldn't buy any of the big banks right now.
