Asia Ex-J Consumer/ Transport analyst

Valerie Law, CFA

Equity Bottom-Up

Commonwealth Bank of Australia / Equity Bottom-Up

<ul class="">
<li>Banks operating in New Zealand must raise Tier-1 capital from 12% to 16% of risk-weighted assets over seven years. </li>
<li>The big four Australian banks, who hold 90 percent of deposits in New Zealand, saw their share prices move in knee-jerk reaction. </li>
</ul>
<ul>
<li>The announcement adds to the existing headwinds such as consumer remediation costs, weak economic outlook, lower interest rates, and the rise of digital-only banks. </li>
</ul>
<ul>
<li>Based on their latest financials and exposure to New Zealand, I pick my favourite and least favourite bank stocks among the Big Four.</li>
</ul>


Banks operating in New Zealand must raise Tier-1 capital from 12% to 16% of risk-weighted assets over seven years. 
The big four Australian banks, who hold 90 percent of deposits in New Zealand, saw their share prices move in knee-jerk reaction. 


The announcement adds to the existing headwinds such as consumer remediation costs, weak economic outlook, lower interest rates, and the rise of digital-only banks. 


Based on their latest financials and exposure to New Zealand, I pick my favourite and least favourite bank stocks among the Big Four.


New Zealand's New Capital Buffer: Prefer CBA Over The Other Big Three