ASX Shares Bank dividend reset dents big four optimism

Discussion in 'Shares & Funds' started by oracle, 27th Oct, 2019.

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  1. oracle

    oracle Well-Known Member

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    Looks like the Big 4 banks dividends are coming under some pressure. In particular, WBC.

    From memory NAB had already cut its dividends last time around from 99c to 83c. Fully expect NAB to cut again from 99c to 83c.

    Does this put LICs under pressure to maintain their dividends when they report in Feb-March next year. Will be interesting to see.

    Full article (behind paywall)
    Bank dividend reset dents big four optimism


    Cheers,
    Oracle.
     
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  2. Zenith Chaos

    Zenith Chaos Well-Known Member

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    The Royal Commission opened Pandora's box on the banks. The key quote from the X-Files sums it up (for those that remember). There will be a financial impact but how much can be smoothed over in the eyes of shareholders remains to be seen.
     
  3. willair

    willair Well-Known Member Premium Member

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    I don't think long term it will make any difference..
     
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  4. oracle

    oracle Well-Known Member

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    You might be right but if you look at NAB over the last 20 odd years the story is pretty grim.

    176F6E64-61F7-43CC-A913-0AD64D58D853.jpeg

    CSL has jumped to number 2 just behind CBA as the most valuable company on ASX.

    Cheers
    Oracle
     
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  5. SatayKing

    SatayKing Well-Known Member

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    Apart from that the income.

    NAB dividend:

    in 1997/98 was $0.94 excluding franking
    in 2018/19 was $1.98 excluding franking and flat for 5 years.

    CSL dividend:

    in 1997/98 $0.16 excluding franking
    in 2018/19 $2.48 unfranked.
     
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  6. oracle

    oracle Well-Known Member

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    Does that include 1 for 3 share split for CSL in 2007?

    Cheers
    Oracle
     
  7. SatayKing

    SatayKing Well-Known Member

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    According to my records:

    13/4/2007: $0.49 Unfranked
    12/10/2007: $0.55 - $50% franked @30%

    14/4/2008: $0.23 unfranked

    So I will assume so. I'm missing some of the older documents which probably went the way all documents generally go when I moved.
     
  8. SatayKing

    SatayKing Well-Known Member

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    I omitted (forgot?) to mention originally CSL declared the dividend in AU$ but at some stage - and I don't know when that occurred - moved to declaring it in US$. I don't know:

    (a) the amounts declared in US$; and
    (b) the relevant exchange rate.
     
  9. willair

    willair Well-Known Member Premium Member

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    Yes if you were just holding NAB then it has not performed well and at the price would be best to just let the dpr work it's magic ,that's when combined with the ''RC'' and the different managerial techniques some with long standing proven success in the prior realm in the 6--8 banks within Australia,under the new system success can easily wreak havoc within the other in the list..imho..
     

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    Last edited: 29th Oct, 2019
  10. DoggaPP

    DoggaPP Well-Known Member

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    For those that still like their dividends for income stream, there are so many ETF's out there just doing the hard work for them without the need to stress over individual bank ownership e.g.

    SYI (looks at 5 years historical for dividends and mostly banks)
    VHY (looks at probable future dividends and a large chunk of banks)
    RARI (despite its name and purpose is actually dividend focused and bank heavy)
    SWTZ (focuses on dividend growth and is bank rich)

    Why fuss over the minute details of owning big bank shares individually when you can get a decent dividend return from any of these ETF's without the hassle and overthinking of individual bank ownership? After all, the only reason you would hold individual bank holdings is for the divvies presumably (?) certainly not for significant growth.


    Just a thought.
     
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  11. willair

    willair Well-Known Member Premium Member

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    When you look at the age group that walk into the Banks AGM'S most would not be that worried about the price of the shares per unit,only the dividend payment 2 times a year and I have never talked to anyone that invested in EFT'S ect but most would be above 55 and carry that independent stand--alone spirit and lived through the 1900's--2000's ,and know the squandering and who were allowed to get away with it that happened in that period..
     
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  12. RogTheBear

    RogTheBear Well-Known Member

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    The assumption is that WBC in particular will cut. There may well be a boost to the share price at the announcement, next week some time, should they do so, because it puts the dividend on a more sustainable footing. Happened for ANZ. Or there may not be. Swings / roundabouts.

    I have a large amount in direct bank shares and they're sitting at about par, so I'm tempted to sell them all and divert to LICs / ETFs and stop worrying.
     
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  13. marty998

    marty998 Well-Known Member

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    Bears pointing out that ANZ today were forced to cut the franking component of the dividend to 70%. Given that only 55% of their earnings came from Australia this year, it was inevitable that they could not continue paying fully franked dividends for much longer.

    Yeah dividend focussed ETF's can be pretty ordinary in terms of overall returns.

    Refer to the little file attached for the returns of VHY vs VAS since January 2005 (using an initial investment of $100,000). With VAS you end end up with $151k, with VHY a little under $130k.

    Over time in future not only will the returns for VAS continue to compound higher, but the absolute value of the dividends will end up being higher too.
     

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  14. SatayKing

    SatayKing Well-Known Member

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    Not having a dig at you but have a wry smile with the attitude which I can understand. Contrast your dilemma - and common one I believe - with the same wish to stop worrying as per a similar one and then the action taken for the superannuation mentioned in another thread.
     
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  15. oracle

    oracle Well-Known Member

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    2671BEB0-6DFC-4116-8C4E-3C100FE395D0.jpeg

    AED44082-6CBA-42D9-9FE5-6CCEDA5FA5FC.jpeg

    Cheers
    Oracle
     
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  16. willair

    willair Well-Known Member Premium Member

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  17. lamecrocs

    lamecrocs Well-Known Member

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  18. SatayKing

    SatayKing Well-Known Member

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  19. lamecrocs

    lamecrocs Well-Known Member

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    But how is WBC going to verify this? Or does it mean the Sophisticated investors need to send in the certification to WBC to qualify?
     
  20. dunno

    dunno Well-Known Member

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    2.5M net assets or 250K annual income for 2 years certified by a registered accountant to qualify. You register with your Broker, nothing to do with the company or its registry.

    Actually getting hold of placements is all about relationship with your broker. If a placement is oversubscribed you can bet your broker didn’t get the entitlement they wanted and will divvy what the did get to their best customer. (institutions, UHNW etc)

    Unless you have a very good relationship with your (typically full-service broker) and are being offered (and take) regular placements – what you do occasionally get offered, you probably don’t want.

    You might strike it lucky sometimes as a run of the mill sophisticated with a retail broker like Commsec if they themselves get an allocation. A sophisticated registered with Westpac Online Investing would probably have the best shot at getting some of the scraps on this raising.
     
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