Bank on a 70% return: Why 'tis the season to be bullish on the Big Four, page-29

From altas fund managment....
What to do with the Australian banks is one of the major questions facing both institutional and retail investors alike, as their share prices have fallen significantly in 2020 and they appear priced for the most pessimistic outcome. The remainder of 2020 will undoubtedly be tough for the Australian economy, but a big difference between the CV-19 crisis and previous crises has been the speed and size of the fiscal responses to CV-19. During the GFC, it took around 12 months for the politicians to respond to the unfolding crisis, mainly due to the impression that those most affected were bankers and US sub-prime borrowers.In 2020 our political masters can see that the virus impacts voters. During the GFC peak stimulus spending in Australia accounted for around 1.8% of GDP, in 2020 the announced measures represent 9.5% of pre-crisis GDP. These measures will soften the impact on loan losses from the banks as stimulus payments flow into the economy. While the outlook for the banks looks uncertain, Australia’s banks have historically performed well coming out of crises that have reduced foreign competition and allowed them to absorb second-tier domestic banks. The threat posed by neo banks in 2019 may well recede as the CV-19 inspired “flight to quality” sees Neo bank deposits switch back to the major banks, at a time when losses on the neobank loan books are increasing. Holding 14.90 support over the next 6 to 12 months is the short term hope. If this maintains im my humble opinion it should start hitting 16's and up...