For some time now (over 1 year) Ive been saying banks were way too expensive and global turmoil would cause havoc to their bad debts.
We are seeing this start now and will be further accellerated by the Aussie drought, property bust, further share market falls and large corporate bankruptcies.
The only reason that they performed so well the past few years is due to monopolistic powers excerted on fees and charges. Aggressive cost cutting and IT spend has also helped. Going forward I dont see how banks are going to make employees work more that 12 hour days or sake even more tellers. As to fees, well don't get me started on that one.
One final thing that will pop the bank bubble would be a major play by a foreign bank. I think this is some time off though due to the current banking climate.
Never forget that banks and insurers are not new ideas... they have been around for many years and its the management quality your buying. Buy cheap, sell expensive. Good luck.
