Well, the Australian economy was hardly affected by the GFC. The banks lost value at the time because of lowering interest rates and the increasing cost of borrowing from overseas, and just the uncertainty. Their bottom lines did not change much at all. Remember during the GFC the banks all continued to pay a very fat dividend, it was something like a 10% yield for WBC for example. That is why the share price recovered so quickly.
This time around their profits have already been shrinking or fixed for the last few years. They already cut their dividend late last year before the fires or Corona came about. The economy was already headed down the toilet before Corona and the fires, this has just made it worse. I think it will take many many years for the banks to recover. Remember it has been less than 2 months since Coronavirus has been around in Aus....and it will be around for another year.
WBC Price at posting:
$15.23 Sentiment: Hold Disclosure: Held
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