Many ASX 200 bank stocks have been falling recently amid banking troubles in the northern hemisphere.
However, at a banking summit this week, Commonwealth Bank of Australia (ASX: CBA) CEO Matt Comyn described the Australian banking system as "extremely strong".
So let's check what could be ahead for ASX 200 banking stocks.
What's ahead?
Firstly, lets take a look at the performance of ASX 200 banking shares in the past month.
- Bendigo and Adelaide Bank (ASX: BEN) shares have slumped 13%
- Bank of Queensland Ltd (ASX: BOQ) shares have fallen 10%
- National Australia Bank Ltd (ASX: NAB) shares have slid nearly 10%
- ANZ Group Holdings Ltd (ASX: ANZ) shares have declined almost 9%
- Westpac Banking Corporation (ASX: WBC) shares have descended nearly 6%
- Commonwealth Bank of Australia (ASX: CBA) shares have dropped 5%.
And yesterday, broker UBS slashed the price target on multiple ASX 200 banking shares.
Bank of Queensland was relegated to a sell with a $6 price target, while NAB and Bendigo Bank were also slashed to sell with $25 and $8 price targets respectively.
The broker retained a neutral rating on CBA but cut the price target to $100, the Australian Financial Review (AFR) reported. UBS also maintained its buy rating on ANZ shares with a downgraded price target of $25. Westpac was cut to neutral with a lowered $22.50 price target.
As quoted in The Australian, UBS analyst John Storey said recent events in the US and Europe have "lowered the confidence threshold of investors for banks in their portfolios". He added:
Australia is no different, with the ASX banking index now down about 6.5 per cent year-to-date compared to the market falling 1.5%.
Extremely strong?
However, on the flip side, CBA boss Matt Comyn described the banking system in Australia as "extremely strong" at the AFR Banking Summit in Sydney.
He said:
I think the Australian banking system is a credit to the policy frameworks [and] is in an extremely strong position. I would say uniquely, globally.
Comyn noted spending still remains strong in hospitality and some parts of retail. He was also optimistic in the lending portfolio going forward:
We don't see rapid deterioration in conditions coming … We see over the course of the year, a gradual [decline] as households come under more pressure each month.
