I am not optimistic on bank shares. Their valuations very...

I am not optimistic on bank shares. Their valuations very quickly came back to almost pre-GFC levels even back in Sep/Oct last year. This is false confidence that our banks are more prudent, have better risk management and of course they made profits when banks overseas made losses and some went belly up.

The is an illusion IMO. The boom-bust cycle here is out of whack with the countries ravaged by the GFC. Our turn of pain is coming up led by residential housing collapse as well as a lot of debt overhang issues with commercial properties (LPT/REIT).

Of course you will never know how sound our banks are until they make a unexpected announcments about bad debt and exposures (like they have done for their overseas exposures last year). Only days before, they all declared they had no such exposures. So far the bad loans (arising from the likes of ABC Childcare, Allco, Opes Prime, Babcock, Timbercorp...etc) are chicken feed compared to the impact of a housing collapse.

I think future capital raising will be likely (hence depressed SP). Our banks won't go bust, the government will at worst natinalize them like thay did in the UK /US (at huge expense of share holders).