is anybody buying banks??, page-17

Mike

My SMH has WBC at 6% against WOW at 4.4%. WIth franking credits, you are looking at 8.6% against 6.3%. If you argue that the 8.6% is based on a high bad debt charge due to the cycle, there is upside on the dividend yield - at 10% it looks very attractive, although you will be looking at 70% payout ratio with the balance to support new business.

WOW has a lower payout ratio to support growth so perhaps not a fair comparison as you have to look at total return. But at 8.6% dividend yield you do not need much capital growth for a decent return. And funding is still tight, competition remote so plenty of opportunity for margin increases, Just wait for the next RBA rate increase (or decrease). I guarantee it will not be passed on.

I have WOW as well as ANZ, CBA. I am pretty boring investment wise - I have a cross section of shares across all sectors. I have a bias to energy but still invest across most sectors in case my energy call is wrong. Has been OK so far.

BTW, should probably disclose, I am a banker........