ASX 200 bank shares had a ripping day, all closing in the green a day after the federal budget.
The Macquarie Group Ltd (ASX: MQG) share price climbed 2.1% today, while National Australia Bank Ltd (ASX: NAB) hiked 0.84%.
Let's take a look at what may have impacted ASX banking shares today.
ASX 200 bank shares rise
ASX bank shares all closed higher today. The Westpac Banking Corp (ASX: WBC) share price gained 0.91% while Commonwealth Bank of Australia (ASX: CBA) finished up 0.66%. Meanwhile, Bendigo and Adelaide Bank Ltd (ASX: BEN) climbed 0.39% and Bank of Queensland Ltd (ASX: BOQ) closed 0.35% higher. The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price rise was more modest at 0.04%.
Accordingly, the S&P/ASX 200 Financials Index (ASX: XFJ) also had a positive day on the ASX today, jumping 0.88%.
The team at Switzer predicted the federal budget would be a positive for banks in a video recorded last night. Commenting on the outlook for banks, Peter Switzer said:
If you've got a strong spending consumer, it's going to be good for our banks as well. So the momentum we've seen in the banks in recent times will also be helped by this budget.
However, the federal budget has also sparked fears of inflation due to the high government debt. But, as my Foolish colleague Zach recently reported, the prospect of rising interest rates could be "a huge positive" for the banks.
Certainly, expectations of future high interest rates policies have increased, Reserve Bank of Australia governor Philip Lowe said recently.
Meantime, financial regulators have warned banks to not let lending standards fall amid predicted interest rate rises.
The Council of Financial Regulators is concerned about high-risk mortgage lending, the Sydney Morning Herald reported.
The Council said:
It is important that lending standards are maintained and that borrowers have adequate buffers, especially in an environment in which housing loan interest rates are at historically low levels and are expected to rise over time in line with the economic recovery
ASX 200 bank shares snapshot
NAB shares have surged nearly 25% in the past year while Commonwealth Bank shares have also gained around 25%. ANZ shares have slipped 0.78% in that time while the Macquarie share price has increased nearly 38%. However, Westpac shares have improved only marginally in the past 12 months by 0.62%.
In comparison, the S&P/ASX 200 Financials Index (ASX: XFJ) has pulled ahead almost 14% in the past year. Meantime, the benchmark S&P/ASX 200 Index (ASX: XJO) has gained around 12%.
