When it comes to ASX banking shares, investors are spoilt for choice. There are of course the majors. The big four consists of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), and Australia and New Zealand Banking Group Ltd (ASX: ANZ).
But there is also Bank of Queensland Limited (ASX: BOQ) and Bendigo and Adelaide Bank Ltd (ASX: BEN). Not to mention Suncorp Group Ltd (ASX: SUN) and AMP Ltd (ASX: AMP), who both have banking operations.
So with so many banks to choose from, how does one pick a winner in this space?
Well, examining the opinions of expert investors and brokers is one way to separate the wheat from the chaff, as it were.
So today, let's check out why investment bank and broker Goldman Sachs singles NAB out as the ASX banking share winner.
Top ASX broker names NAB share price as a buy
Yes, Goldman Sachs currently rates NAB shares as a buy, with a 12-month share price target of $31.15. That implies a future potential upside of almost 6% on the current NAB share price. That's not including any dividend or franking returns either. Together with potential share buybacks over the next 12 months, Goldman sees a potential total shareholder return of around13%.
Goldman states NAB "remains our preferred sector exposure". This bullish opinion is driven by NAB's cost management initiatives, which the broker reckons are "further progressed relative to peers". These will help NAB divert resources towards customer experience and away from the business' infrastructure, Goldman argues.
It also likes how NAB is more focused on commercial banking than the more retail-focused CBA and Westpac. It sees margins in the commercial small and medium enterprise (SME) market as more lucrative than the residential mortgage market seeing as competition is "less intense".
Finally, Goldman notes that NAB is showing "good balance sheet momentum… with growth across all divisions".
So Goldman certainly sees some upside in NAB as its preferred ASX banking share going into 2022. No doubt shareholders will be pleased with this assessment.
At the current NAB share price, this ASX bank has a market capitalisation of $96.07 billion, with a dividend yield of 4.31%.
