HellRaiser - FYI

  1. Yak
    13,672 Posts.
    Seeing you are deeply in lust with the banks - thought you might like to se MCQN views on them:

    Banking Sector

    We believe like the mortgage market of a few years ago, the Australian credit card industry is
    about to under go a seismic shift which will threaten industry growth and profitability.
    Credit cards are a key pillar of retail banking. Globally, the business is highly profitable and
    growing fast. However, in Australia the industry’s profitability and growth potential are under
    threat from regulators, politicians and new entrants.
    The Australian Competition and Consumer Commission (ACCC) and Reserve Bank of
    Australia (RBA) claim banks have “encouraged the growth of the credit card” and as a result
    “Australia has a higher cost retail payments system than necessary”. Further, the RBA is
    explicitly encouraging new players to enter the market, looking to spark more intense
    competition.
    Based on the RBA’s preliminary findings on interchange fees, the industry is set to forfeit
    between $2bn and $3bn over the next three years. By itself this would make credit card
    issuing in Australia unprofitable.
    National Australia Bank (NAB) and Commonwealth Bank (CBA) are the best positioned
    against the RBA’s proposed interchange reforms. However, in the long term the industry is
    likely to repeat the experience of the mortgage market – emerging as a more competitive, less
    profitable industry. We maintain our underweight view of the sector. Our favourite stock is
    NAB and least preferred is Westpac.
 
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