5 key charts for Big Four Bank investors

The banking sector has been subject to a myriad of headwinds such as elevated costs, margin deterioration, customer behavioural changes and fierce competition. But through all of this, Commonwealth Bank (ASX: CBA) shares hit an all-time high of $118.24 on Wednesday, rising an extraordinary 23% in just the past three months.

Are bank stocks running without any fundamental backing? Or is the industry proving to be much more resilient than expected? Data from Morgan Stanley's 'Australia Banks Loan Tracker' reaffirms the latter, with solid growth across housing and business loans, and household deposits.

Here are five key data points that bank investors should take note of.

#1 Housing Loan Growth

In 2023, Australian housing loans grew by about 4%, business loans about 6.5% and household deposits about 7.5%, according to Morgan Stanley.

"Despite another rate hike in November, growth remained robust into year end," the analysts said, adding that the "annualised growth rate in Australian system housing loans was about 4% in December."

"For the full year in 2023, the majors' Australian housing loans grew by an average of about 4%, in line with system growth. ANZ was well above peers."

Source: Morgan Stanley

#2 First-half FY24 Momentum

Morgan Stanley expects average mortgage growth rates among major banks to slow to 3.5% in FY24 (ANZ approx. 5%; CBA approx. 1.5%; NAB approx. 3.5% and WBC approx. 4.5%).

"However, growth is currently tracking ahead of our 1H24E estimates for ANZ and NAB. In contrast, growth at BEN and BOQ is tracking below our forecasts."

Source: Morgan Stanley

Source: Morgan Stanley

Growth for CBA and Westpac were broadly in-line with forecasts.

#3 Household Deposits

"During 2023, household deposits grew by around A$100 billion or approximately 7.5%. Among the majors, WBC delivered the strongest growth during the year (ANZ: approx. 6%; CBA: approx. 6%; NAB: approx. 7.5%; WBC: approx. 9%)."

Source: Morgan Stanley

#4 Business Loan Growth

The annualised growth rate in business loans was steady at approximately 6.5% in December, in-line with the average growth rate in 2023. Growth in loans to non-financial corporations rose 5.5% year-on-year, led by CBA (+7.9%), NAB (+6.5%), Westpac (+4.0%) and ANZ (+2.6%).

Source: Morgan Stanley

#5 Market Share At A Glance

And finally – Its always interesting to compare the growth rates and market share percentages among the major and regional banks.

Source: Morgan Stanley