The ASX bank shares of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ), and National Australia Bank Ltd (ASX: NAB) have largely had a strong April compared to the S&P/ASX 200 Index (ASX: XJO).
In the month to date:
The ASX 200 has risen 2.8%.
The CBA share price has risen 8.25%.
The Westpac share price has gone up 3.4%.
The NAB share price has climbed 5.6%.
The ANZ share price has underperformed, climbing just 1.4%.
While the month isn't quite over yet, I think bank shareholders can be pleased with how things have gone amid the volatility surrounding US tariffs.
Past performance is not a guarantee of future performance, but it's worthwhile considering what could happen next. Experts at Macquarie have given their view on the ASX bank shares.
Let's have a look at what the investment bank thinks of the situation.
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Institutional buying supports ASX bank shares
According to a note from Macquarie, offshore and domestic institutions were net buyers of ASX bank shares in the three months to March 2025.
Macquarie suggested that while US tariffs drove global market volatility, the Australian banks were seen as a "relative safe haven".
Offshore investors in particular have reportedly been moving capital into Australian banks because of their "relatively limited impact" from US tariffs. Macquarie data suggests that offshore investors increased their cumulative net buying of financials by around 22% since Trump's 'Liberation Day'.
Macquarie then said:
While we agree with this safe haven sentiment in the short term, given limited direct impact from tariffs on Australia, we caution downside risk to earnings from lower rates in FY26. Indeed, at face value, market pricing for the RBA (~150bps of cuts in 2025) and recent moves in swap rates imply material downside to our and consensus margin expectations.
Australian superannuation funds also remain large buyers of ASX bank shares, though these purchases were "driven largely by inflows" rather than strategic decisions.
Macquarie suggested that international and domestic institutions both bought around $800 million of ASX bank shares in the three months to 31 March 2025. Domestic institutions largely bought Westpac shares (around $700 million) and sold NAB shares (around $300 million). Interestingly, international investors mostly bought NAB shares (around $500 million).
This buying was largely offset by a large amount of small investors (retail) selling approximately $2.7 billion of ASX bank shares.
How could investing change in the future?
Macquarie pointed out that net contributions to superannuation funds could continue to rise. However, this may not mean a proportional increase of bank buying. The investment bank said:
Indeed, net contributions increased to a record $68bn in the year to Dec-24 and are likely to increase to $70-80bn ahead. Interestingly, allocations to Australian equities pulled back modestly in Dec-24, albeit remain near decade highs. Looking forward, with several funds noting that they are reaching capacity for Australian investments, incremental inflows will increasingly move offshore, meaning super funds will potentially be a relatively less important driver of flows than they have been over the last 1-2 years.
ASX bank shares may need to deliver profit growth to justify higher price-earnings (P/E) ratios than today, in my view.
Time will tell how well banks can perform from here.
