I have little doubt Aus won't escape the GFC Mk II. Let's say GDP decreaases by 2% each yr, for next 3 years. Can banks still make reasonable profits in this environment? We know defaults on mortgages, small business loans and personal loans will escalate. Commercial property will see a few spectacular collapses but far far fewer due to 100Billion raised in GFC 1. Some loss is insured by the banks and losses may be manageable. But we still pay bank fees, credit cardfees, and fees on most transactions. Banks aso own life insurance and other insurance businesses. Are these sufficient to ensure banks will continue to pay dividends albeit at a reduced rate? I don't know. Do any HC readers?
WBC Price at posting:
$20.16 Sentiment: None Disclosure: Not Held
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