ASX 200 bank shares have stalled in the past month with momentum likely dampened by the recent jump in COVID-19 cases and extended lockdowns across major Australian cities.
The banking heavyweights, Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd. (ASX: NAB), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) might also need a breather after surging 20-30% year-to-date.
The Australian reported that major banks might soon begin to feel the impact of lockdowns as volume and housing growth begin to moderate.
Lockdowns could slow near-term growth prospects for ASX 200 bank shares
The Australian quoted commentary from Macquarie which flagged that “housing growth for the major banks, excluding the troubled ANZ Bank business, moderated to 6-7 per cent from double-digit annualised growth in June.”
More broadly speaking, the Australian Bureau of Statistics reported a 1.6% month-on-month decline in new loan commitments for housing, despite surging 82.7% in the past 12-months.
By comparison, housing loan commitments increased 5.5%, 3.7% and 4.9% across March, April and May respectively.
“While the full impact of the current lockdown will not be known for some time, we expect balance sheet growth to dampen in the fourth quarter of this year and potentially in the first quarter of 2022,” Macquarie reported.
It could go both ways
Despite the prospect of slowing housing and loan growth, Macquarie analysts said that “if property prices continue to rise, the likely pent-up demand may result in a better outlook for 2022 credit growth.”
The Australian would point to redeeming factors such as the “relatively buoyant” 0.7% increase in Australia’s gross domestic product in June.
“The Australian Bureau of Statistics said domestic demand explained the better than anticipated result, with housing spending, private investment and public expenditure all strong, offsetting a fall in mining export volumes.”