Doing well despite ex-divividend!, page-7

re: Doing well despite ex-divividend!-to Fortius Don't see anything that is going to materially change sentiment towards CBA (or any of the other bank for that matter) happening over the next few week.

All banks are now pretty well priced the same - in terms of market price vis-a-vis key operating ratios

Medium/longer term you will see a lot of debate about the impact on bank's profitabilty of a rising interest rate enviroment. In turn, and also, their share market price.

On balance, I believe rising inerest rates are favourable for the banks bottom line. They can pass on the full rise on the lending side, yet increase depositor rates by less than the RBA hike.

We have seen testimony to that during the just past easing cycle - bank's net interest margins have decreased (they would have you believe it is competition at work!) accross the board. After all, if the RBA cuts 25 bp then politically you must cut your lending rates by a like amount. However, if you are only paying depositor's 0.01% interest on deposits of less than $5,000, then how can you cut any more? Of course you can't so there goes 25bp off your margin.

Now the bank's will regain that lost margin, and contibute to overall profitability - which is just as well as they are running out of ways to cut costs and introduce new fees.

Summary:

. CBA will do nothing startling over the next month.
. Banks will hold their ground vis-a-vis the overall market
. Days of bank's outperforming the general market are over