Aussie banks among the best in the world

MELBOURNE: Australian banks are performing better than many of their overseas peers and local banking stocks are still good value, ANZ chief executive Mike Smith says.

The Australian Associated Press said some analysts believe Australian banking stocks were 10 to 15 per cent overvalued, but Smith says local banks were among the best in the world.

“Are they fundamentally overvalued I wouldn’t say so,” Smith told ABC’s Insider Business programme on Sunday.

“They are performing better than many of their global peers.” ANZ shares closed at A$ 31.60 on Friday, remaining at six year highs after the company lifted its dividend and posted a A$ 3 billionplus half year profit last week.

High yielding financial stocks have received a substantial boost in recent months.

Westpac Bank shares are up almost 30 per cent for the year.

On Friday Westpac announced a special dividend after posting a record A$ 3.3 billion first half profit.

Smith added that ANZ needed to use technology ‘ far better’ and indicated the bank would move more of its services online.

He believes the global economy is still fragile and Europe is likely to be a mess for a while.

“All this austerity just doesn’t work, you’ve got to create some stimulus as well,” Smith said.

However, he is bullish on Asia, where the bank’s future growth is heavily invested.

He said the shift in economic power from the west to the east had decades to run. The bulk of the bank’s earnings still come from Australia and New Zealand, with only 20 per cent derived from offshore. — Bernama