0139 GMT - The divergence in valuation between Commonwealth Bank and Australian major banking peers Westpac and ANZ looks unjustified, according to Morningstar analyst Nathan Zaia. In the ratings company's 1Q Australian bank report, it sees that Westpac and ANZ are modestly undervalued, while CBA is expensive. At the cheaper end is MyState and Bank of Queensland. But, price/book discounts should unwind as Westpac and ANZ hold market share and deliver similar earnings growth to CBA. Morningstar expects that overall, Australian banks will pull back from aggressive competition on new loans and deposit rates to prevent return on equity from sliding below cost of equity. (alice.uribe@wsj.com)
(END) Dow Jones Newswires
April 11, 2024 21:40 ET (01:40 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments