ASX 200 bank shares received some good support from ASX investors on Wednesday.
The Westpac Banking Corp (ASX: WBC) share price rose by 3.75% to finish at $22.41.
The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price went up 3.34% to $24.75.
The Commonwealth Bank of Australia (ASX: CBA) share price rose by 2.44% to close at $96.29.
National Australia Bank Ltd (ASX: NAB) shares went up 1.32% to $29.88.
By comparison, the S&P/ASX 200 Index (ASX: XJO) closed just 0.04% higher at 6,647.5 points.
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Why did ASX 200 bank shares do well today?
The first factor is a flow-on effect after Bank of Queensland Ltd (ASX: BOQ) shares rose by an astonishing 11.3%.
That happened because the bank released its full-year results today. And, boy, were shareholders happy.
They appeared unperturbed about the 5% decline in cash earnings for the 12 months ending 31 August.
The key detail that likely excited them was a better-than-expected net interest margin (NIM) at the end of FY22.
Top broker Goldman Sachs stated:
The highlight of the result was that BOQ's 4Q22 NIM came in at 1.81%, well ahead of the 1.75% 2H22 average, and also our FY23E forecast of 1.78% and Visible Alpha Consensus Data forecast of 1.75%.
This is good news for all banking stocks because investors have been worrying about NIMs all year.
The NIM is the amount of money ASX 200 banks earn from the interest paid by loan holders less the interest paid by the banks to savings deposit holders.
Rising interest rates are great for banks because they can charge more interest on existing and new loans. But they can also lead to reduced new mortgage lending and increased bad debts.
So, investors have been wondering what the NIMS of the big ASX 200 bank shares are going to look like when a bunch of the big lenders report their full-year results in the next month or so.
After seeing the Bank of Queensland's NIM and its share price response today, they're likely assuming other ASX 200 bank shares are poised to rise when those banks report their results.
Three of the big four will report shortly. ANZ on 27 October, Westpac on 7 November, and NAB on 9 November.
Adding to the momentum for ASX 200 bank shares today, CBA held its annual general meeting.
CBA CEO Matt Comyn spoke positively about the outlook:
Overall, we remain fundamentally optimistic about the medium to long term opportunities for Australia, as well as our capacity to provide support in the immediate future for customers who need us.
What do the experts think of the banks?
As we reported recently, head of Australian equities at Tyndall Asset Management Brad Potter expects the banks' net interest margins (NIMs) to "continue to increase strongly over the next six to 12 months", which will lead to "decent earnings growth".
The wholesale Tyndall Australian share fund holds all four ASX 200 bank shares. It is overweight in Westpac and ANZ shares and underweight in CBA shares.
