Don’t get the fascination with dividends myself, it’s not like the money disappears if the bank doesn’t pay it. You’ll get the return the dividend represented later. All that matters is the underlying earning ability of the company, which, while impaired for the time being, I expect to return to similar levels in a couple of years, which makes the current prices a bargain in my book.
People looking for more downside from here will need something pretty big to save them. Banks are well capitalised, and will continue to generate copious amounts of money - 90% of the workforce will stay in jobs, and most of those who lost their jobs already won’t be enough to do meaningful damage to that.
I must say, I prefer ANZ/WBC course of action to NAB’s. Rather than stretch themselves to pay a dividend, only to dilute holders at rock bottom prices, they conserve cash to make sure they can get by without a raising.
WBC Price at posting:
$15.77 Sentiment: Buy Disclosure: Held
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