What about the next tier of banks, like AMP or BOQ – are they likely to see more serious growth as the demand for lending increases, with the economy picking up?
A: I am in the camp that the minor/regional banks have already had their run. If you look at their performance over the last 2 years, you will see that most of the regional banks have outperformed the major banks (Commonwealth Bank largely excepted).
Going forward, I don’t quite see the evidence for continued outperformance. They could be winners from the Murray Inquiry (question whether some of this may be already priced in) – my sense is that their biggest risk will be lack of investment in technology.
So, I am not inclined to make the switch into the regionals.
