ASX bank shares will be on watch today as credit ratings agency Fitch upgraded its outlook for two of the majors.
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Why are ASX bank shares worth watching?
National Australia Bank Limited (ASX: NAB) last night provided a price-sensitive announcement after the market's close. That update detailed Fitch Ratings' revised outlook for the bank from 'Negative' to 'Stable'.
According to the release, the change in ratings outlook "reflects Fitch's view of the improved economic prospects in Australia". Fitch affirmed both NAB and its New Zealand subsidiary, Bank of New Zealand's, long-term issuer credit ratings at 'A+' and 'F1' for short-term.
However, NAB isn't the only ASX bank share to watch today. Australia and New Zealand Banking Group Ltd (ASX: ANZ) provided a similar update early this morning.
Fitch has also revised the outlook on long-term Issuer Default Rating (IDR) for ANZ and ANZ Bank New Zealand Limited from 'Negative' to 'Stable'.
ANZ and ANZNZ's long-term IDR remains at 'A+'. According to the ANZ release, Fitch has "greater confidence that ANZ's financial profile is likely to remain consistent with its current ratings over the next two years".
Notably, the ratings agency expects "GDP to expand by 4.7% in 2021". ASX bank shares like ANZ and NAB could be worth watching as investors take in the latest forecasts from the likes of Fitch.
However, there was a cautionary note that "downside remains", particularly until vaccinations are complete. The ratings agency said that this downside risk has reduced significantly since early 2020.
Foolish takeaway
ASX bank shares will be worth watching following the Fitch revisions in the last 24 hours.
Both the NAB and ANZ share price have been climbing higher in 2021 amid growing investor optimism for an economic recovery. These two ASX bank shares have jumped 17.0% and 25.3%, respectively, so far this year.
The S&P/ASX 200 Index (ASX: XJO) has climbed 4.3% higher despite getting off to a slow start this week. The benchmark Aussie index edged 0.3% lower to 6,974.00 points at Monday's close.
