The banking sector is a sea of red on Friday morning.
At the time of writing, all of the big four banks are trading sharply lower along with the regional players.
Here's a summary of what's happening with ASX 200 bank shares today:
- The ANZ Group Holdings Ltd (ASX: ANZ) share price is down 3%
- The Bank of Queensland Ltd (ASX: BOQ) share price has dropped 2.2%
- The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is 2.8% lower
- The Commonwealth Bank of Australia (ASX: CBA) share price has fallen almost 3%
- The Macquarie Group Ltd (ASX: MQG) share price is down almost 3%
- The National Australia Bank Ltd (ASX: NAB) share price has dropped 2.5%
- The Westpac Banking Corp (ASX: WBC) share price has fallen 3%
Why are ASX 200 bank shares falling?
Investors have been hitting the sell button on Friday in response to a very poor night of trade for US bank stocks on Wall Street. In fact, things were so bad for bank stocks that the financial sector had its worst session since 2020, dropping a sizeable 4.1%.
According to CNBC, this was driven by concerns that higher interest rates could result in banks facing large loan losses.
This followed news that the SVB Financial share price had crashed 60% after it announced a plan to raise more than $2 billion in capital in a bid to offset losses from bond sales.
Is this a buying opportunity?
Given that Australian banks appeared to be in strong financial health when they last updated the market, this could potentially be a buying opportunity for investors. Especially with the Reserve Bank hinting that there may only be one more rate hike to come.
Two broker recommendations that could be worth thinking about involve ANZ and Westpac.
Citi has named ANZ as its top pick in the sector and has a buy rating and $29.20 price target on its shares.
Whereas Goldman Sachs has a conviction buy rating and $27.74 price target on Westpac's shares. It has named Australia's oldest bank as its top pick in the sector.
