The ANZ share price was the worst hit. At time of writing it is down 2.52%, trading at $27.05.
Much of this can be attributed to the appearance of Westpac and CBA before the House of Reps standing committee on economics.
Major banks still facing compliance issues
One of the most intriguing things to come out of the questions posed to CBA CEO Matt Comyn was that the company is still struggling to remove ongoing fees for around 3% of wealth customers and that the process will be completed over the next week and a half.
This is despite the ASIC deadline having already passed.
Perhaps the prospect of further compliance issues and remediation costs spooked investors as the day wore on.
The perception following the release of the Banking Royal Commission’s final report was that the banks had got off lightly.
When asked about the rally in stocks of the Big Four following the release, Comyn said:
‘I see that an enormous amount of work that needs to get done, that’s what I’m focused on, rather than the short-term movements in the share price.’
Outlook for ANZ share price and the other Big Four banks
It looks for the moment as if a sustained bounce is a long way off for the Big Four and their share prices.
The RBA has recently stressed growing ‘downside risks’ for the global economy and blue chip stocks like the Big Four look vulnerable if a major sell-off in equities occurs.
That being said, they traditionally offer strong dividends and income investors may (perhaps mistakenly) think that these shares are at or near a bottom.
I have an inkling though, that their dividends may be shaved going forward as wholesale costs come under pressure amid the real estate slowdown.
It will be interesting to see how shares in the financial sector perform when the NAB and ANZ CEOs are dragged before the committee later this month.
For Money Morning