The ASX 200 index had modest gains in 2024 as it continued to lag behind its American peers like the S&P 500 and Nasdaq 100 indices. It rose by about 7% in local currency terms and much lower in USD terms since the Australian dollar has crashed. So, how did the top ASX 200 index banks do in 2024?
Westpac share price surged 42%
Westpac, one of the top four banks in Australia, performed strongly during the year, jumping by 42%. This rally made it the best-performing Australian banks and one of the top gainers in the ASX 200 index.
Westpac’s stock performance was because of its business growth, helped by the relatively higher interest rates. The most recent annual results showed that its net interest income rose by 3% to over $18 billion in the last financial year. Excluding notable items, the NIM fell by about 1 basis point.
Non-interest income fell by 15% to $2.8 billion, while the total number of loans issued rose slightly to over $807 billion. Deposits rose by 5% to $674 billion.
Westpac’s stock price jumped as the company used its excess returns to pay dividends, which now yield 4.78%. It paid 151 cents per share, near the upper side of its guidance.
Read more: Here’s why ANZ, CBA, NAB, and Westpac share prices are surging
CBA share price soared 37%
The Commonwealth Bank of Australia (CBA) stock price rose by 37% in 2024, making it one of its best annual performances. Like Westpac, its business did well because of the RBA’s elevated interest rates. Unlike other central banks, the RBA maintained higher rates and hinted that it would start cutting them in 2025.
CBA, which has over 17.4 million customers, said that its net profit for the year was $9.48 billion, down by 6% from a year earlier. This decline happened because of the higher base set in 2023 as interest rates rose.
The net profit after tax fell by 2% to $9.8 billion, while its operating income was over $27 billion. CBA’ business did well across its retail, institutional banking and markets, and business banking divisions.
CBA continued to pay its dividends, bringing its yield to about 3.60%. It paid a dividend of $4.65 a share during the year.
NAB Bank share price rose by 20% in 2024
The NAB Bank share price rose by 20% during the year as its statutory net profit tracked that of other big banks. However, its profit dropped by 6.1% to $6.9 billion, while its cash earnings fell by 8.1% to $7.1 billion.
Like the other banks, the company experienced low net income margins during the year as competition pushed it to lower lending rates.
The stock rose as management expressed hope that revenue and margin pressures would moderate in the second half of the year. NAB Bank paid 85 cents a share, giving it a dividend yield of 4.75%.
ANZ Bank shares rose by just 10%
ANZ Bank was the worst-performing Australian big four banks as its stock rose by about 10% during the year. This performance is mostly because the company has a bigger role in the New Zealand economy than the other three. It has a 28% market share in the economy which is not doing so well.
ANZ Bank stock also lagged because of its giant purchase of Suncorp Bank. Like the other big four bank, ANZ Bank’s cash profit dropped to $6.92 billion in the last financial year from $7.4 billion a year earlier. Earnings per share also moved from 247 cents to 231 cents. This decline happened as the company saw a weaker net income margin, which dropped slightly.
Looking ahead, the big ASX 200 banks will react to the upcoming interest rates by the Reserve Bank of Australia. Analysts expect the companies will continue their recovery in the next financial year.
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