Home / Sector / Bank Shares / Ditching NAB for this ASX 200 bank share instead: fundie

Ditching NAB for this ASX 200 bank share instead: fundie

We take a look at why this investment manager is removing NAB.

Posted by
Monica O'Shea
Monica is a journalist with experience working for Daily Mail Australia in Sydney and the Port Pirie Recorder and the Flinders News in South Australia. Monica completed a cadetship in 2013. She also hold a B.Science (Biotechnology) with Honours from the University of Adelaide. Monica has worked in government at the local, state and federal level. Monica has a keen interest in finance and the share market and enjoys exploring the highs and lows. When not writing for Motley Fool Australia, Monica enjoys travel, sport, music, and likes to play the violin in her spare time. For story tips and broker tips, email me at [email protected]
Published
| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points
  • One investment management company has ditched NAB shares 
  • The company has chosen to invest in another bank instead 
  • The bank share has been added to the portfolio on "weakness" 

One investment management company has decided to cut NAB shares and buy up another ASX 200 bank share instead.

National Australia Bank Ltd (ASX: NAB) shares finished trading down 1.54% at $31.40 on Friday. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) finished Friday down 0.80%.

Let's take a look at which ASX 200 bank share this fundie recommends.

A middle-aged woman sits in contemplation over a tablet device considering information about ASX shares and deep in thought.

Image source: Getty Images

Virgin Money

NAB may be one of the big four banks in Australia, but Allan Gray Australia has decided to add Virgin Money Uk Plc (ASX: VUK) to its equity fund instead. Virgin Money shares closed flat on Friday at 2.25.

Investment specialist Julian Morrison said Virgin Money, along with QBE Insurance Group Ltd (ASX: QBE) has been added to the portfolio "on weakness".

Morrison said Allan Gray Australia sold its last exposure to NAB shares in the September quarter.

Commenting on this decision in a September 2022 quarterly review, Morrison added:

Virgin Money faces some challenges – hence the depressed share price. But with the price reflecting around 0.5 times net tangible asset (NTA) value, the company is at a very material discount to other banks and factors in a significant margin of safety.

By comparison, CBA and NAB trade on a price-to-NTA multiple of around 2 and 1.7 times
respectively.

The Allan Gray Australia Equity Fund also includes exposure to Australia and New Zealand Banking Group Ltd (ASX: ANZ), Westpac Banking Corporation (ASX: WBC) and AMP Ltd (ASX: AMP). Morrison said:

Elsewhere in financials, AMP bucked the trend and contributed very strongly to outperformance. We also had positive contribution from exposures to ANZ and Westpac.

However, Macquarie analysts recently recommended investors buy the NAB share price. Analysts have placed a $32.25 price target on NAB shares. Out of all the big four banks, Macquarie sees NAB as the best bank to buy.

Share price snapshot

NAB shares have risen 9% in the past 12 months and the year to date. Meanwhile, Virgin Money shares have fallen 39% in the past year and 32% in the year to date.

In comparison, the ASX 200 has shed 10% in the past year and year to date.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Bank Shares

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Bank Shares

Here's why this top broker is tipping 27% upside for ANZ shares

| James Mickleboro

The Silicon Valley Bank collapse has weighed heavily on ANZ's shares and could have created a buying opportunity.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Bank Shares

Is the Westpac share price a buy below $22?

| Bernd Struben

Westpac’s net interest margins could benefit from any further rate hikes by the RBA.

Read more »

Person with thumbs down and a red sad face poster covering the face.
Bank Shares

Why did the Bank of Queensland share price just hit a multi-year low?

| Sebastian Bowen

Bank of Queensland shares just went backwards by nearly two years.

Read more »

A man sits uncomfortably at his laptop computer in an outdoor location at a table with trees in the background as he clutches the back of his neck with a wincing look on his face.
Bank Shares

ASX 200 bank shares punished again on US bank fallout

| Bernd Struben

Investors in ASX 200 bank shares are jittery in the wake of SVB’s financial implosion last week.

Read more »

Confident male executive dressed in a dark blue suit leans against a doorway with his arms crossed in the corporate office
Bank Shares

ASX 200 bank shares: Are they better prepared than Silicon Valley Bank?

| Mitchell Lawler

How ready are our banks for a real life stress test?

Read more »

three reasons to buy asx shares represented by man in red jumper holding up three fingers
Bank Shares

3 reasons the 8% NAB dividend yield looks safe to me

| Tristan Harrison

The bank could keep paying a very good dividend.

Read more »

a small girl empties a piggy bank of coins onto a table while her mother looks on in the background.
Bank Shares

Here's how much I'd need to invest in Westpac shares to generate a $150 monthly income

| Sebastian Bowen

Here's how much income you can get from Westpac shares right now.

Read more »

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Bank Shares

Why are ASX 200 bank shares like CBA being annihilated today?

| James Mickleboro

It has not been a great day to be invested in the banking sector.

Read more »