National Australia Bank Ltd (ASX: NAB) shares finished the session on Wednesday up 0.75% to $28.31 apiece.
ASX bank shares have travelled a rocky road over the past week. This follows news from the United States last week that Silicon Valley Bank (SVB), a technology specialist lender, has collapsed.
The biggest US bank failure since the global financial crisis led to the worst session for US financial stocks since 2020, with the equities dropping 4.1%.
ASX bank shares followed the US lead and were annihilated last Friday.
Then came the news that US regulators have also closed another bank. This time it's crypto industry specialist lender, Signature Bank.
The result of all this chaos has been five days of trading hell for ASX bank shares.
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Which ASX bank share has fallen the most?
Here are the share price movements of the big four ASX banks over the past five days:
- The National Australia Bank Ltd (ASX: NAB) share price has dropped 4.9%
- The ANZ Group Holdings Ltd (ASX: ANZ) share price is down 4.8%
- The Commonwealth Bank of Australia (ASX: CBA) share price has fallen 3.4%
- The Westpac Banking Corp (ASX: WBC) share price is down 2.8%.
The US Treasury Department, Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) have swooped in to guarantee depositors' funds. There won't be any losses, so the drama is over for now.
So, is this a buy-the-dip opportunity on ASX bank shares?
As my Fool colleague Mitchell reports, ASX banks are certainly better positioned than SVB.
And given NAB shares have fallen the most, are they the best option for today's investors?
Are NAB shares a buy?
Top broker Goldman Sachs has a buy rating on NAB shares and a 12-month price target of $35.42.
That implies a potential upside of 25% for investors who buy now.
The broker says NAB shares are attractive because the bank has a larger exposure to business lending than the other banks.
You see, that could be an advantage in today's economy when rising inflation and interest rates are hurting household budgets, and creating some risk of mortgage defaults for all of the banks.
The broker said:
We are Buy rated on NAB given: i) we see volume momentum over the next 12 months as favouring commercial volumes over housing volumes and NAB provides the best exposure to this thematic, ii) NAB has delivered the highest levels of productivity over the last three years, which we think leaves it well positioned for an environment of elevated inflationary pressure
ASX bank shares are also known for being good dividend payers.
This might be another reason for investors to jump on NAB shares right now, given a fallen share price equates to a higher dividend yield. (That's as long as the share price fall has nothing to do with poor operations, which can lead to a dividend cut. In this case, NAB shares have fallen due to market panic over SVB's collapse.)
Goldman expects NAB shares to pay fully franked dividends of $1.73 per share in FY23 and $1.76 per share in FY24.
Based on the closing value of NAB shares today, that means a yield of 6.1% and 6.2% respectively.
