Retail ownership of major banks at record low: Jarden
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The news: Retail ownership of major banks has fallen to a record low in the June quarter, Jarden analysts say, as dividends moderated and share prices rose.
The numbers: Based on the latest share ownership date, retail shareholders were net sellers during the June quarter, leaving three of the big four banks — CBA, NAB and ANZ — with record low retail ownership. Comparatively, offshore ownership has continued to rise, with CBA leading with 23.8% at June-end.
Domestic institutions have also continued to increase ownership of the major banks, Jarden’s analysis revealed.
The context: The broker is ‘overweight’ on NAB and Westpac, citing the potential for improved earnings on lower-than-expected bad and doubtful debts and slightly better net interest margins.
The changing ownership preference comes at a time when the major banks earnings have been under pressure, resulting in smaller dividends and share buybacks. There is also a very broad consensus that Australian banks are overpriced given their lacklustre earnings.
What they said: “We note retail shareholding of banks has been in a broad downward trend, with ANZ ⁄ CBA ⁄ NAB all now having their lowest share of retail ownership on record," Jarden said.
"WBC's retail ownership was also down in June but is relatively more resilient, perhaps reflecting its higher dividend yield and the appeal of its recent special dividend."
The source: Jarden research
