Investors hoping to earn some handy passive income on the side could take a look at ASX 200 bank shares.
Two ASX 200 bank shares that could provide monthly passive income are Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB). In fact, these two have already announced interim dividends for FY23.
ANZ Group Holdings Ltd (ASX: ANZ) is due to report its financial results today, while Westpac Banking Corporation (ASX: WBC) is due to report next week.
Let's take a look at how I could receive $200 monthly income with Commonwealth Bank and NAB shares.
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Could I receive $200 monthly income from CBA and NAB?
Firstly, it's worth noting the calculations I am looking at reflect dividend payments announced in the last year. Of course, the dividends for these ASX 200 bank shares could change in the future.
Secondly, a $200 monthly income equates to $2,400 in annual income.
Taking a look at Commonwealth Bank of Australia, the biggest of the big four paid an interim dividend of $2.10 in the first half of this year. This followed a $2.10 final dividend in the second half of 2022.
This equates to $4.20 in dividend payments from the CBA overall in the year.
The bank's share price dropped 7% in the last year and last closed at $95.76.
Based on CBA's latest share price, this represents a trailing dividend yield of about 4.4%.
Let's now take a look at the NAB dividend. NAB yesterday announced an interim dividend to shareholders of 83 cents per share fully franked. This will be paid on 5 July 2023.
NAB paid a 78 cents per share final dividend in the second half of last year.
In total, this means NAB is paying $1.61 worth of dividends to investors in a year.
National Australia Bank shares fell 6.41% on Thursday following the release of the company's results and closed at $26.72 each. NAB shares have fallen nearly 18% in a year.
However, based on Thursday's closing price, NAB's dividend yield is 6%.
What would I need to invest to get $200 a month?
If I invest the same amount in both NAB and CBA shares, my average dividend yield would be 5.2%.
So, to generate $200 a month (or $2,400 a year) in passive income with a 5.2% average dividend yield, I would need to invest $46,153.85 in these two shares overall.
Another approach would be to invest $3,846 a month for the next 12 months in these two ASX bank shares.
