Economic concerns rob banks of their pre-May lustre
Since trading closed on the last day of April, Westpac shares have lost 12.6 per cent of their value, ANZ shares have lost 10.4 per cent, and CBA shares 6.9 per cent.The S&P/ASX200 index has fallen through most of May, but only by a total of 4.9 per cent.NAB shares have outperformed the index for the month because of a surge after the bank's 5 May profit announcement, falling just 4.1 per cent since the 29 April close. But, since 9 May, NAB shares have been in the same club as the rest of the Big Four, matching or exceeding the market's fall.Before May, the Big Four had outperformed the S&P/ASX200 for 2011, with Westpac and NAB doing the best.Some commentary has tied the banks' May fall to concerns about their exposure to wholesale funding markets. Ratings' agency Moody's underlined these concerns when it downgraded Australian bank debt last week, although the downgrading had long been expected.Possibly more important have been renewed concerns over Australian economic growth, which could restrict growth in commercial lending and home mortgages, and over the recent reported rises in 90 days past due loans. Goldman Sachs acknowledged those sentiments yesterday when it told clients its model portfolio was now underweight in banks.