The big four S&P/ASX 200 Index (ASX: XJO) bank shares are trailing the benchmark on Thursday.
In afternoon trade, the ASX 200 is down 0.2%. But the big bank stocks are all deeper in the red, which sees the S&P/ASX 200 Financials Index (ASX: XFJ) down 0.5% at this same time.
Here's how the big four ASX 200 bank shares are tracking today:
- Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are down 1.1%
- National Australia Bank Ltd (ASX: NAB) shares are down 0.9%
- Westpac Banking Corp (ASX: WBC) shares are down 1.2%
- Commonwealth Bank of Australia (ASX: CBA) shares are down 0.6%
So, what's going on?
Competition heating up amongst ASX 200 bank shares
ASX 200 bank shares look to be seeing some extra selling action today amid news that the competition in Australia's lucrative home loan market could be heating back up.
All of the ASX 200 bank shares saw their net interest margins come under pressure in the first half of last year amid cash back offers and other low interest home loan incentives intended to lure more customers.
In the latter months of 2023 CBA – which has long held a dominant share of the Aussie mortgage market – eased off on the battle for market share with its rivals to protect its net interest margins, which are closely linked to profits.
This pullback saw CBA's share of the mortgage market shrink for several months in the second half of 2023, potentially benefiting its rival ASX 200 bank shares.
But Australia's biggest bank looks to be changing tactics to claw back its shrinking market share. And potentially more.
Citing industry insiders who wished to remain anonymous, The Australian reported that CBA is now cutting mortgage rates within its own lending channels to attract more home loans.
But the big bank is apparently trying to keep any notions of a rate war quiet.
According to one market source, CBA was "public about being out of the market and moving their pricing out for brokers, but what we are seeing is them stepping back into very aggressive pricing in their proprietary channel".
They added, "We are seeing the cheapest pricing of any major from them and we are being asked (by customers) to match it, but we are saying no."
With the prospect of a renewed, profit-eroding mortgage lending rate war in 2024, investors appear to be repositioning their allocations to the ASX 200 bank shares today.
