A: BOQ and BEN are not impacted by the new capital requirements (ie the part that relates to risk weights for residential home loans). The APRA change only affects the major banks and Macquarie.

That said, they will need to be seen as “unquestionably strong” and over time, they will be under pressure to improve their capital base.

In regards to regional banks vs the major banks – I can’t readily see any great attraction to the regional banks. Three years back, the regional banks were particularly cheap – however, that gap narrowed more than 12 months back. Today, pricing metrics are pretty similar, and strategically, I can’t see the case for investing in the regionals.

The brokers are marginally more positive. On a scale of -1.0 (most negative) to +1.0 (most positive), Bendigo is rated at -0.3 with a consensus target price of $12.36. BOQ is rated at -0.1, with a target price of $13.44 (Source FN Arena)

Hope this helps.