Many posters justify buying bank shares for the 'high' divs on offer. But is the time to be buying bank stocks? I don't think so. Does anybody seriously suggest bank profits in FY09 will equal the record profits made in FY08? No chance of this as banks will IMO use the cover of the 'financial crisis' to write off large amounts in bad and doubtful debts. The 'crisis' will be used by management to explain away cost increases and reduced profits. Hence, i expect for the full year in both 09 and 10 that bank divs will be less than in FY2008. While Aussie banks have zero possibility of going bust i reckon we are 2-4 years away from decent growth in bank profits and am happy to wait for strong signs of a return to earnings growth before buying in. Plenty other shares offer higher divs than banks along with forecasts of earnings growth.
