The Australian share market was on form in FY 2024. During the 12 months, the S&P/ASX 200 Index (ASX: XJO) delivered a return of 7.8% before dividends.
A key driver of these gains was the banking sector, which delivered market-beating returns over the period. This was driven by investors piling into this side of the market in response to better than expected performances and an improving outlook.
But which ASX bank shares were the best to own in the last financial year? Let's find out.
Bendigo and Adelaide Bank Ltd (ASX: BEN)
The Bendigo and Adelaide Bank share price was up 38% in FY 2024. This was despite a reasonably average performance from the regional bank during the 12 months. For example, in February, Bendigo and Adelaide Bank reported a 5% decline in cash earnings after tax to $268.2 million. However, the ASX bank share was arguably oversold a year ago and had a long way to bounce back as conditions in the banking sector improved
National Australia Bank Ltd (ASX: NAB)
The NAB share price wasn't far behind with a gain of 37% during the year. Investors appear to have been buying the banking giant's shares after rate hikes failed to cause a spike in bad debts. And while the bank's financial performance wasn't great on paper, it is performing in line with expectations during the current financial year. Together with its strong balance sheet, this allowed the ASX bank share to announce a new $1.5 billion share buyback.
Westpac Banking Corp (ASX: WBC)
The Westpac share price had a strong year and rose 27.6% over the period. Once again, Westpac posted a half-year result that was largely in line with expectations. And like NAB, the bank decided its balance sheet was strong enough to allow another $1 billion on-market share buyback. An added bonus for shareholders was the special dividend that was announced with its half-year results.
Commonwealth Bank of Australia (ASX: CBA)
The CBA share price was just behind with a gain of 27% during the financial year. Investors were bidding Australia's largest bank to record highs as banking sector optimism reached fever pitch. Interestingly, this was despite almost every major broker declaring the bank's shares as overvalued 12 months ago.
ANZ Group Holdings Ltd (ASX: ANZ)
The ANZ share price was the next best performer with a 19.1% gain over the period. It was a busy period for the ASX bank share and its shareholders. ANZ delivered a solid half year result in May, announced another $2 billion share buyback, and made major progress with its proposed takeover of the banking operations of Suncorp Group Ltd (ASX: SUN). In fact, at the close of the financial year, the transaction was all but complete.
