The banking sector has taken a bit of a hit this year amid concerns over the collapse of Credit Suisse and Silicon Valley Bank.
This has left many ASX 200 bank shares trading at a sizeable discount to the prices that investors were willing to pay to own their shares just a matter of a few months ago.
Given this recent weakness, investors may be wondering which of the big four banks could be buys right now.
Well, to help narrow things down, the team at Morgans has been running the rule over the sector and has named only one of the big four as a buy, with the rest being dealt hold ratings.
Let's take a look at what the broker is saying about these ASX 200 bank shares.
ANZ Group Holdings Ltd (ASX: ANZ)
Morgans has retained its hold rating on ANZ with an improved price target of $26.24. It commented:
Recent loan and deposit market share growth (but at what returns?). Lowest low rate fixed rate loan exposure. Leading institutional banking franchise. Greater diversification into US$ and NZ economy. Valuation support and attractive yield. Cautious re M&A (NOHC implications) and tech transition to a digital bank
Commonwealth Bank of Australia (ASX: CBA)
The broker also has a hold rating on Commonwealth Bank's shares with a boosted price target of $97.87. Its analysts commented:
The largest and highest quality bank, with a loyal retail investor and customer base. Highest return on equity (supported by buybacks) and lowest cost of equity. Leading technology. Cautious re: largest fixed rate loan cliff exposure, weakest valuation support, and lowest dividend yield.
National Australia Bank Ltd (ASX: NAB)
NAB is the third of the big four banks to be given a hold rating. However, on this occasion the broker has reduced its price target to $28.78. The broker said:
Recent slowing of loan growth. Leading SME relationship banking franchise. Increased simplification and improving digitisation in personal banking. Meaningful improvement in ROE that is in excess of cost of equity. Attractive yield and buyback. Cautious re step-up in costs and weaker valuation support.
Westpac Banking Corp (ASX: WBC)
The only ASX 200 big four bank share that Morgans rates as a buy is Westpac. It has retained its add rating with an improved price target of $25.98. It said:
Greatest potential improvement in ROE (vs relatively low risk profile) via cost-out targets, business exits, rates leverage, efficiency lift (including regulatory capital reduction), and lifting loan growth. Valuation support and strong yield. Cautious re: ability to deliver transformation and market share improvement.
