1Mon·

Sell bank shares?

As you probably know, the profitability of banks depends heavily on the prime rate. As it is to be expected that this will fall again in the next few years, bank profits should also fall again. What is your opinion? Sell or hold? For information: Hold at present $BG (+0.8%) and $RBI (+1.03%)

5 Comments

D.S.@Crash-Propheteus

1Mon

Sell everything immediately, they will all expire worthless........(no investment advice)

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Dividendenopi👴@Dividendenopi

1Mon

In my view, you can keep them both. Interest rates or not, Austrian banks are doing well in Eastern Europe and should there actually be a "peace settlement", they would benefit more from the reconstruction

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BoldTake@BoldTake

1Mon

Well. The statement that the profitability of a bank is strongly dependent on the prime rate is not correct. That may have been true 100 years ago, but today it is the exception rather than the rule :)

And even if the prime rate falls, banks continue to earn money through their interest rate transactions. After all, if the prime rate is 0%, the interest rate you get is not 0% (even if this is more due to risk models).

Conclusion: Make your bank investment independent of the current interest rate. If you want to profit from falling interest rates, you can take a look at REIT shares. The interest rate environment is significantly changing the business model here

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SanSebastian@WarrenamBuffet

1Mon

Are you trading or investing for the long term? Did you only buy them for a certain phase? If you ask yourself these questions, you will find your answer ;)

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Eddi@financial_ninja_104

1Mon

I also have Bawag in my portfolio and am keeping it.
Let's be honest. The loans for houses are usually long-term. In other words, it takes years until less comes in.
And most banks charge outrageously high interest rates of well over 10% for overdrafts. Not much will change in the short term.
And if that's not enough, the account fees will simply be raised ;-)

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