Australian bank stocks shot higher this morning following APRA’s announcement on capital requirements, and they’re picking up even more steam in afternoon trade.
ANZ bank is leading the way, a short time ago up more than 4%. All other three majors are now more than 3% higher, with Westpac second best at a gain of 3.9%.
UBS banking analyst Jon Mott said this morning that ANZ is the closest of all the major banks to meeting APRA’s new capital adequacy ratio.
Among the regional banks, Bank of Queensland is more than 2% higher and Suncorp was up by 0.6%. Bendigo & Adelaide has reversed this morning’s fall, a short time ago up by 0.4%.
The ASX financials index is now up by more than 2.5%, and is dragging the local market higher on a down day for the resources & materials sectors.
Today’s surge in bank stocks is a sharp turnaround from recent months, with the ASX200 financials index falling by around 9% since the start of May.
Since then, there’s been a mild increase in short positions on Australia’s major banks, amid the introduction of the federal government’s bank levy in mid-May and concerns around how APRA would define “unquestionably strong” capital requirements.
Data from ASIC shows that short positions in Commonwealth Bank increased from around 1% of issued capital at the start of May to 1.4% at the end of last week.
Today’s announcement by APRA has clearly alleviated some of the market’s concerns about the strength of Australia’s banking sector.