Why were ANZ shares the worst performing major bank in November?

It wasn't a wonderful month for ANZ.

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The ANZ Group Holdings Ltd (ASX: ANZ) share price went backwards by almost 2% in November 2023, underperforming the other major ASX bank shares.

In fact, the other three big banks were in positive territory for the month:

The Commonwealth Bank of Australia (ASX: CBA) share price rose 8.04%, shares in Westpac Banking Corp (ASX: WBC) share price were 3.04% higher, and the National Australia Bank Ltd (ASX: NAB) share price climbed 0.85%.

The S&P/ASX 200 Index (ASX: XJO) was also higher over the same period, up 4.5%, meaning ANZ shares underperformed the ASX 200 by more than 6%.

What's going on for the ASX bank share?

As we can see, ANZ shares materially underperformed. However, we shouldn't read too much into how a share price performed in a short-term timeframe like a month.

Banks are in the tricky position of trying to be very profitable for shareholders, but balancing the need to offer compelling loan rates to maintain (or grow) market share and also ensure borrowers can afford their repayments.

There is a lot of competition between lenders for customers. Any lender can offer a loan. I think a loan is a commodity-like product these days, particularly with lenders not needing a branch network to compete. Plus, mortgage brokers are taking more of the power in the loan ecosystem, making it easier to choose the most compelling loan.

That may explain the uncertainty surrounding the ANZ share price. However, it's also decreasing the price/earnings (P/E) ratio, which some investors may find more attractive.

According to Commsec, the ANZ is projected to generate earnings per share (EPS) of $2.10 in FY24, which would put the ASX bank share at under 12x FY24's estimated earnings.

Are there positives for ANZ shares?

According to reporting by The Australian, the broker UBS thinks ANZ could be one of the ones to outperform, as well as Macquarie and CBA.

Why? It's reportedly because ANZ "offers diversification" through the bank's unique strategy to offer institutional banking and payment infrastructure services to big clients globally, with a particular focus on Asia.

ANZ is working on growing its market share in the home loan market by offering borrowers cashbacks and attempting a takeover of the banking operations of Suncorp Group Ltd (ASX: SUN).

Broker rating on the ANZ share price

UBS is currently neutral on ANZ shares, with a price target of $24.18. At the close of trade on Thursday, the ANZ share price is $24.37, meaning the broker doesn't expect the ASX bank share to be higher in 12 months from now.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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