Are Bank Stocks a Buy? CBA, NAB, ANZ, Westpac, MQG

Key Takeaways

• Big four hold ~70% of Australian mortgages
• Banks delivered ~6% annual returns over past decade
• ROE has been declining despite steady returns
• Analysts over‑estimated recession risk, missed bank resilience
• Under the Radar held, added, now taking limited profits

Pulse Analysis

Australia’s banking landscape is uniquely concentrated, with the four major lenders—Commonwealth Bank, NAB, ANZ and Westpac—accounting for roughly seventy percent of mortgage originations. This scale, combined with a regulatory framework that favors stability, gives these institutions a durable competitive moat. Under the Radar’s Blue Chip service has leveraged this structural advantage, positioning the banks as core holdings for long‑term portfolios while offering a free, in‑depth banking report to broaden investor access.

Performance data tells a nuanced story. Over the last ten years the big banks have delivered close to six percent annual total returns, a respectable figure given the low‑interest‑rate environment. Yet return on equity has trended downward, a metric that many sell‑side analysts have used to justify bearish calls. Hemming contends that these analysts over‑projected a severe downturn and underestimated the sector’s resilience, especially as Australia has avoided a meaningful recession and benefited from strong housing demand and rising asset prices.

For investors, the key insight is the importance of balance‑sheet strength over headline earnings metrics. By focusing on capital adequacy, liquidity and asset quality, Under the Radar has been able to hold and selectively add to its bank positions while the market sold off. As the macro backdrop remains supportive—low rates, steady loan growth, and limited credit stress—these banks are poised to continue delivering modest, risk‑adjusted returns, making them attractive for diversified, long‑term portfolios.