Just wanted to give you a heads up, I sold my banking exposure this morning. This includes Auswide, and although arguably cheap I am very concerned that banks are under-provisioning including majors and the risk of a housing decline/mortgage stress scenario which is not currently fully priced in, many are ahead on payments which is a good sign but the risks don't outweigh the benefits especially if provisioning eats into profits and dividends. Overall banks have a comfortable cushion with current CET ratios and a potential run on the banks remains low but I believe that many sub-prime mortgages are at risk of default if we see a cash rate higher than 5%, inflation remains more entrenched than anticipated and a recession is probable. House prices being resilient may provide room for additional rate hikes especially given peers such as RBNZ cash rate is 5.5% and US Fed is at 5-5.25% for reference.
I hope I am wrong but this is just a precautionary measure, I'm happy to buy back at a higher price if the potential risk is alleviated.
