Banks outperform the market
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The recent performance of the Australian banks on the ASX has been impressive. All the banks have risen strongly off recent lows and while gains have moderated future share price gains look certain.
During the recent global downturn the gains in market share by the Australian Big 4 banks has been staggering. As the smaller lenders and part players in the market have either disappeared or been acquired by the big four the future gains of the big banks has been even further cemented.
The real issue in the Australian banking sector now is the lack of competition in the market. As the big banks have approximately 90% of the market share alternate market lenders lack the mass and capital to compete. This will lead to future out-performance of the banks and increasing lending margins that will impact home buyers much more than investors.