Australian banks have been hit hard by the Hayne royal commission. But how have they performed over the longer term?
I was inspired to answer this question after considering the performance of America’s biggest bank, JPMorgan Chase. Chief executive Jamie Dimon is the longest-serving chief executive on Wall Street. He led the bank through the financial crisis when its share price fell to just under US$23 in January 2009, four months after the collapse of Lehman Brothers. This week, under Dimon’s leadership, JPMorgan Chase shares hit at a record high of US$120. The bank has a market cap of $381 billion.
Take a look at how these six Australian banks have performed since the global financial crisis (GFC):
1. Macquarie: up 653 per cent
Macquarie shares have grown significantly since hitting a low of $19 in late February 2009. Today they are trading at around $128, a 653 per cent increase in just over a decade. Allan Moss handed over the CEO reins to Nicholas Moore in May 2008. Mr Moore led the business through the financial crisis and delivered a $2.6 billion profit for the group before retiring in November last year. He was CEO for over a decade.
2. CBA: up 182 per cent
Unlike JPMorgan Chase, some Aussie banks have had multiple leadership changes since the GFC. The nation’s biggest bank, CBA, was led by Ralph Norris during the financial crisis, when its shares were trading at $29 in early January 2009. Since then the group’s share price has risen 182 per cent to $82.
3. ANZ: up 125 per cent
The smallest of the big four banks by market capitalisation, ANZ was led by Mike Smith during the financial crisis, when its share price hit a low of $12 in January 2009. Shayne Elliott took over as CEO in 2015, becoming the first internally appointed CEO in 30 years. The bank’s share price has more than doubled since the GFC to around $27 today.
4. Westpac: up 100 per cent
Gail Kelly took over as Westpac CEO in February 2008 and led the bank through the financial crisis. Its share price dropped to $14.5 in January 2009 and has doubled in 10 years to around $29 today. The bank has been led by CEO Brian Hartzer since February 2015.
5. NAB: up 81 per cent
NAB was singled out in the royal commission final report for its poor oversight and leadership, particularly in relation to fees or no service. Today, NAB shares are trading at $29 under the leadership of new CEO Ross McEwan, an 81 per cent increase in March 2009.
6. AMP: down 52 per cent
AMP shares plummeted to $3.82 in early March 2009 from a record high of $10.84 a year earlier. But today they are trading at a record low of $1.83. New CEO Francesco De Ferrari is confident he can turn the business around, investing over $500 billion in the group’s wealth business over the next three years with a focus on digital advice.
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