Australia | Jun 05 2006
By Terry Hughes
Like many things in life choosing stocks is all about perception. When it comes to banking stocks the analysts at ABN Amro and Credit Suisse could hardly view the sector more differently.
In ABN’s view, National Australia Bank (NAB) is the preferred banking stock, as the analysts feel it has the greatest potential for upside earnings surprises as it has more flexibility in terms of costs than its peers and due to business lending.
They also flag the possibility of capital management in FY07.
ANZ (ANZ) is ABN’s number two, then come St George (SGB), Westpac (WBC) and Commonwealth Bank (CBA).
Macquarie Bank (MBL) doesn’t even make it into the broker’s top five.
At Credit Suisse, Macquarie is top pick, followed by ANZ, Westpac, St George, Suncorp Metway (SUN), Commonwealth Bank and last on the list National Australia Bank.
A quick look at FN Arena’s Sentiment Indicator shows that the overall consensus view is more supportive of Credit Suisse’s interpretation.
Macquarie Bank has a rating of 0.8 (with 1.0 being the highest possible and minus 1.0 the lowest), Westpac is second on 0.3, ANZ third on 0.2, National, St George and Suncorp Metway are joint fourth on 0.1 and Commonwealth is last on 0.0.