Volt gets packing as ASX 200 bank shares prove to be a formidable force

The big banks beat out the market today. Here’s what happened…

| More on:
Four businessmen in suits pose together in a martial arts style pose as if ready to engage in competition or spring into a fight.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The ASX 200 had a pretty poor day today
  • But even so, ASX bank shares showed some significant outperformance
  • Perhaps news of the latest neobank collapse boosted the big four today...

It wasn’t too long ago that we were all hearing about the ‘neobank’ and how it was going to disrupt the entrenched power of the famous big four ASX banks. The ASX banks, some more than a century old, could not compete with the lithe, disruptive new banks, unburdened by the creaking infrastructure and shaky reputations of the old bank shares. Or at least that’s what we heard.

Well, today, that rosy vision is in tatters. Neobank 36 400 was bought out by National Australia Bank Ltd (ASX: NAB) last year. Fellow neobank Xinja collapsed a few months later. And today, we’ve got the news that its neobanking peer Volt has also hit the wall.

This morning, Volt posted a statement on its website. Here’s some of what it said:

Volt Bank Limited (Volt) is closing its deposit taking business and intends to return its banking licence. Customers need to withdraw their funds from their Volt bank accounts before the 5th of July 2022

Volt has made the difficult decision to close its deposit taking business and has commenced the process of returning all deposits to its account holders… It is recommended that all customers stop using their accounts immediately.

Bank shares rise amid Volt closing its (digital) doors

So Volt has sparked out. Shorted. So how did the ASX bank shares react today? Well, the S&P/ASX 200 Index (ASX: XJO) closed down 0.64% today. But shares of the big four did a little better. Commonwealth Bank of Australia (ASX: CBA) also ended up down 0.58% at $93.00 a share. But it was the only member of the big four to record a loss.

Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares rose by 0.94% to $22.63. NAB closed up 1.01% at $28.07. And Westpac Banking Corp (ASX: WBC) shares lifted by 0.96% to  $19.94.

So it’s unclear whether the Volt news out this morning was alone responsible for saving the ASX 200 bank shares from the wider market’s falls today. But it is certainly likely to be a factor in the banks’ marked outperformance today. So Australia’s experiment with neobanks certainly seems to be at a low point. The major ASX banks aren’t called the big four for any old reason, it seems.

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank Limited. 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 recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Bank Shares

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Bank Shares

How big is the CBA dividend yield right now?

How good is CBA’s dividend yield?

Read more »

A woman looks questioning as she puts a coin into a piggy bank.
Bank Shares

What does CommBank’s latest update mean for NAB shares?

Is CBA coming for NAB’s lunch?

Read more »

A woman in a bright yellow jumper looks happily at her yellow piggy bank representing bank dividends and in particular the CBA dividend
Bank Shares

Is the CBA share price a buy after the bank’s FY22 results?

Is now a good time to buy CBA's shares?

Read more »

Smiling man sits in front of a graph on computer while using his mobile phone.
Bank Shares

Why did the ANZ share price have such a stellar run today?

ANZ shares were on form on Wednesday. Here's why...

Read more »

Happy couple at Bank ATM machine.
Bank Shares

Is the Bank of Queensland share price a smart ASX 200 bank buy?

Is this regional bank an underrated pick in the sector?

Read more »

Female ASX travel shares investor with surprised expression drinks a cup of tea while reading the newspaper at her desk
Bank Shares

‘It’s a bit unfair’: Here’s why ANZ shares are making news this week

The bank's boss has responded to criticism from the federal treasurer.

Read more »

Food price shock ASX shares expensive, shock, price, cost
Bank Shares

The CBA share price looks downright expensive

We check the credentials of shares in Australia's largest bank, among other market prospects.

Read more »

Woman sitting at a desk shrugs.
Bank Shares

CBA share price slides today despite an 11% FY22 earnings leap

CommBank's net interest margins (NIM) declined year on year, which could be contributing to today's selling.

Read more »