Forget CBA! Here are the 5 best performing ASX bank shares of FY21

Investors laughed all the way to the bank on these ASX shares in FY21…

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ASX bank shares performed strongly in the last financial year. In fact, the financial sectors outperformed the S&P/ASX 200 Index (ASX: XJO) by roughly 7% over the period. But not every bank share in the All Ordinaries performed so exceptionally.

We have compiled a list of the best-performing bank shares featured in the All Ordinaries index for FY21. This also includes non-bank lenders, just to broaden out the list a bit further than the big four.

While there's a couple you might be familiar with, there are others that might have flown under your radar. Despite the Commonwealth Bank of Australia's (ASX: CBA) impressive 42.9% share price gain, it didn't make the cut…

So, no more suspense – here are the banks that did it best in FY21.

5 best performing ASX bank shares

Bendigo and Adelaide Bank Ltd (ASX: BEN)

Bendigo and Adelaide Bank Ltd is Australia's largest retail bank outside of the big 4 ASX banks. The company has a network of brands that provide products to customers including personal banking, business banking, and insurance.

Compared to the big four, Bendigo Bank pulls humble-sized revenue and earnings. However, it is the pace at which this bank's earnings bounced back that grasped investors' attention. Between June 2020 and December, Bendigo Bank's 12-month trailing earnings jumped 50.9% to $290.9 million. At the same time, CBA (the largest bank on the ASX) continued to experience a slide in earnings.

On top of that, the Bendigo and Adelaide Bank board declared a fully franked dividend of 28 cents per share in its half-year results.

With all that positive sentiment, it's no wonder the Bendigo and Adelaide Bank share price gained 48.4% during FY21.

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

Next on the list is one of the big four banks. Shares in ANZ were bought up by investors during FY21 as revenue and earnings rebounded. Although these numbers didn't climb at the same rate as the previous bank, the magnitude was much larger.

During the first half, ANZ delivered a statutory profit after tax of $2,943 million. This result represented a 45% increase on the bank's second half of FY20. Analysts at Morgans are expecting this trend to continue.

Correspondingly, Morgans is forecasting these growing earnings will translate into dividends of $1.45 and $1.63 per share over the next two years.

The ANZ share price returned 49.1% over the course of the last financial year.

Australian Finance Group Limited (ASX: AFG)

Making the podium finish is Australian Finance Group. This company has been a leading mortgage broker in the country for more than 20 years. AFG provides mortgage aggregation as well as business finance, insurance, etc. The company services more than 27,000 home loans and boasts a residential loan book worth more than $160 billion.

A true testament to this ASX bank share, AFG's revenue and earnings didn't skip a beat throughout the past 18 months. In the company's half-year result, total revenue increased 11% year-over-year, while underlying net profit after tax rose 41% to $24.88 million. This result was largely supported by the strong residential mortgage market.

Investors must have liked the look of the growing profitability with the share price rising 66% during the last financial year.  

Virgin Money UK CDI (ASX: VUK)

Coming in at second-best on the list is Virgin Money UK. For those unaware, this is a holding company that owns and operates Clydesdale Bank, Yorkshire Bank, and B. Between these UK-based banks, Virgin Money serves around 3 million customers through its credit cards, personal loans, mortgages, etc.

The company suffered a massive blow to its revenue during the COVID-19 fallout. Between the end of 2019 and the end of 2020, Virgin Money's revenue fell from UK£1.441 billion to UK£1.004 billion. Since then, a global economic rebound and government stimulus have seen sentiment swing towards positive.

Shareholders of this ASX-listed bank share would be celebrating their 113% return in FY21. That's nearly 5 times better than the benchmark index.

Resimac Group Ltd (ASX: RMC)

Finally, the crème de la crème in FY21… Resimac Group. This company is a non-bank lender which means Resimac doesn't offer transaction and savings accounts to lend out to others. Instead, the company takes on debt in the form of a credit line and then lends it out to customers.

Resimac has been a beneficiary of the booming property market. According to the company's first half, home loan assets under management (AUM) increased from $11.3 billion to $12.9 billion year-over-year. Additionally, the increase in AUM drove the company's earnings up 88% to $50.5 million compared to the prior corresponding period.

The strong performance pushed the Resimac share price higher in FY21. Shareholders were laughing all the way to the bank with a 135% gain during the financial year.

Motley Fool contributor Mitchell Lawler owns shares of Commonwealth Bank of Australia. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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