Hi Mike, dont forget that the margins are driven by both sides...

Hi Mike, dont forget that the margins are driven by both sides of the balance sheet, Liabilities (Deposits) and Assets (Loans). The Treasury manage the liquidity position and do it well. Margin pressure has certainly been felt on the Mortgage front, I can say from first hand experience, as my business with a circa $7b balance sheet has been under pressure. The reason why it has been so noticeable is that there has been no growth in business/commercial lending which the been hurting the banks. This is where they cross fertilise through the balance sheet management and have been increasing margins over time to compensate for reducing home loan margins. A nice fat margin on the commercial loan book allows us to write home mortgages at very skinny margins today. However, the risk reward principle is accurate here. Mortgage book safe as houses, business/commercial far more risky and allows us to charge solid margins. The banks are good money managers mate. The margin growth will come when business/commercial lending growth returns and that will be soon as economy picks up. Businesses have been de-gearing balance sheets since the GFC, but will start to invest soon. When they do, borrowing growth will run. Margins have already moved consistently upwards in commercial/business over the last 15 mths and when the surge to borrow comes again, so will the margin growth. I maintain that the banks are good trading stocks if you pick them at the right time. Pivot highs and lows, of the charts. Not sure we will see the $30+ SP again for WBC and ANZ, but they move in cycles like all others and I for one am happy to trade them short term. I am certainly not advocating to buy and hold LT unless you want the 6% yields. I would rather take the trading option and pick up 50%+ yields per quarter. I guess its just my opinion at the end of the day, but the banks have been good to me over the years. Cheers