by Megan Stals

Which are the best ASX bank shares to buy in 2023?

The ASX has several big names for those interested in putting some extra money in the bank.

Which Big 4 bank stock is performing best in Australia?

Australia's banking sector is dominated by the Big 4 banks. Commonwealth Bank, Westpac Banking Corp, National Australia Bank Ltd and ANZ Group are major players for retail and business customers in the country.

The general downturn in the stock market and the initial shock of interest rate rises have affected the performance of banking stocks.

As of 26 May 2023, Commonwealth Bank ($CBA) had a one-year return of -7.88%, but provided 42.88% over a five-year period. This is an overall positive result at this point in time.

ANZ ($ANZ) returned -8.21% and -11.73% over the same time, while Westpac's ($WBC) results were -13.63% and -24.59% respectively. NAB ($NAB) has struggled recently with a -17.65% on year performance, but managed to almost break even with -1.58% over five years.

However, many investors are focused on the dividends paid out by these ASX shares, rather than capital growth. These regular, high dividend payments mean they're still a popular choice for ASX investors despite largely negative share price performances.

Top 10 bank stocks on ASX

Company Name


Stock Price


Market Capitalisation

Commonwealth Bank of Australia





National Australia Bank Ltd





Westpac Banking Corp





Australia and New Zealand Banking Group





Macquarie Group Limited





Suncorp Group Limited





Bendigo and Adelaide Bank Ltd





Bank of Queensland





Virgin Money UK PLC





Judo Capital Holdings





*The list of stocks are the biggest banks in Australia by market cap.

Data as of 26 May 2023.

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Watch these 10 Australian bank shares in 2023

1. Commonwealth Bank of Australia ($CBA)

Market Capitalisation: $165.45b

Stock price (as of 26/05/2023): $98.16

Stake Platform Bought / Sold (1 Jan 2023 - 26 May 2023): 56% / 44%

Commonwealth Bank of Australia (CBA) is the largest banking stock in the nation, with a market cap approximately double of its nearest competitor in May 2023. It was originally owned by the federal government and held the role of effectively acting as the Reserve Bank of Australia (RBA) until its establishment in 1960. CBA offers a comprehensive range of banking and financial services to individuals, businesses, and institutional clients.

The bank is known for its leadership in digital services and technical capabilities. CBA was the main financial institution for 34.7% of Australians in H1 2023. In this period they were also responsible for a quarter of the home lending market. They also provide business loans, corporate banking, wealth management and insurance services to a variety of customers. CBA has the largest market share for payment terminals and business transaction accounts of the Big 4.

🆚 Compare CBA vs NAB stock comparison

2. Westpac Banking Corporation ($WBC)

Market Capitalisation: $73.41b

Stock price (as of 26/05/2023): $20.92

Stake Platform Bought / Sold (1 Jan 2023 - 26 May 2023): 45% / 55%

Westpac Banking Corporation (WBC) began its journey as the Bank of New South Wales in 1917 and is considered the country's oldest bank. It serves a wide range of customers, including individuals, businesses, and institutions, with a wide range of banking, financial, and wealth management services. WBC also provides these services in New Zealand, as one of the country's largest banks.

WBC manages its consumer banking segment under several brands, including Westpac, St George, Bank of Melbourne, BankSA and BT. The company serves over 14 million customers through these brands. WBC's shares have struggled to breakout in recent years, with many critics blaming underinvestment in technology and the related higher costs leading to lower operational efficiencies.

3. National Australia Bank Ltd ($NAB)

Market Capitalisation: $82.33b

Stock price (as of 26/05/2023): $26.23

Stake Platform Bought / Sold (1 Jan 2023 - 26 May 2023): 58% / 42%

National Australia Bank (NAB) was formed in 1982 through the merger of the National Bank of Australasia and the Commercial Banking Company of Sydney. It offers a comprehensive suite of banking and financial services to retail customers, businesses, corporations, and institutional clients. NAB is known for its relatively high exposure to business banking and lower levels of residential mortgages compared to the other Big 4.

The bank works with small, medium and large firms through their business lifecycle. They provide loans, merchant services, trade finance, and specialised industry expertise. NAB is active in infrastructure financing and has an extensive wealth management arm. It operates in New Zealand as Bank of New Zealand.

🆚 Compare NAB vs ANZ stock comparison

4. Australia and New Zealand Banking Group ($ANZ)

Market Capitalisation: $70.49b

Stock price (as of 26/05/2023): $23.47

Stake Platform Bought / Sold (1 Jan 2023 - 26 May 2023): 51% / 49%

Australia and New Zealand Banking Group (ANZ) provides banking services and financial products to approximately eight and a half million retail and business customers. ANZ has retail, institutional and commercial divisions in Australia. They work with around half a million small and medium-sized businesses in the commercial segment. Transaction banking, markets and loans are provided to institutional clients.

ANZ's New Zealand arm comprises of only retail and commercial units. They are the smallest of the Big 4 banks and are actively trying to grow through acquisitions. The Australian Competition and Consumer Commission is currently reviewing ANZ's proposed acquisition of Suncorp Bank, from financial services firm Suncorp Group ($SUN). The move could expand their retail and commercial divisions, as well as extend their geographic realm into other parts of Australia.

5. Macquarie Group Limited ($MQG)

Market Capitalisation: $68.00b

Stock price (as of 26/05/2023): $174.00

Stake Platform Bought / Sold (1 Jan 2023 - 26 May 2023): 52% / 48%

Known as the millionaire's factory, Macquarie is a diversified financial group with four operating divisions and over $871b in assets under management globally. They primarily operate as an investment bank, with international ventures and asset management providing the bulk of their revenues rather than retail clients. They tend to serve high net worth customers with a range of more sophisticated financial products. Retail is part of the banking and financial services segment, while asset management is another.

Commodities and global markets have integrated equities, fixed income, foreign and commodities offering of over 200 products in more than 25 markets. Macquarie Capital - is a global advisory and corporate capital raising service, with particular strengths in infrastructure and green energy. Macquarie's strong recent earnings were largely due to successes in energy trading and investors will need to wait to see whether this trend can be sustained.

6. Bendigo and Adelaide Bank Ltd ($BEN)

Market Capitalisation: $4.92b

Stock price (as of 26/05/2023): $8.66

Stake Platform Bought / Sold (1 Jan 2023 - 26 May 2023): 57% / 43%

Retail banking is the largest segment for Bendigo and Adelaide Bank. They provide various services like transaction accounts, loans, credit cards, insurance and financial planning advice to individual customers. The offerings to small and medium sized businesses have grown in recent years, similarly, there is a focus on community banking. Bendigo often partners with communities to establish branches in the area and contributes a portion back into local initiatives.

This strategy is supported by a range of specialised products for rural and agricultural firms. They've focused on improving their digital capabilities, with platforms like tic:toc and were responsible for nearly 25% of digital mortgages in Australia by the end of 2022. Bendigo has also targeted young clients through mobile-only neobank Up.

7. Bank of Queensland ($BOQ)

Market Capitalisation: $3.70b

Stock price (as of 26/05/2023): $5.67

Stake Platform Bought / Sold (1 Jan 2023 - 26 May 2023): 64% / 36%

Bank of Queensland (BoQ) is one of Australia's leading regional banks with over 180 branches across the country. It has retail and business banking services. They provide products for small and medium sized firms, with a focus on family firms, healthcare and agriculture. As a smaller institution, it has a lower credit rating compared to the Big 4 banks and this affects its borrowing capabilities.

BoQ acquired ME Bank in 2021 and has been working on a long-term integration plan. Management is also focused on simplifying products and using technology to consolidate systems. In a similar move to Bendigo, they are trying to increase their number of younger customers. The group's been targeted through improved digital capabilities and high interest savings accounts. BoQ also owns digital bank Virgin Money Australia.

8. Suncorp Group Limited ($SUN)

Market Capitalisation: $16.54b

Stock price (as of 26/05/2023): $13.06

Stake Platform Bought / Sold (1 Jan 2023 - 26 May 2023): 54% / 46%

Suncorp offers banking, wealth management and insurance through brands like Suncorp, GIO and AAMI. It's one of the largest general insurance providers in Australia. Suncorp caters to individuals, businesses, and organisations with a wide range of insurance products. Suncorp provides investment solutions, superannuation products, retirement planning and financial advice management services through its subsidiary, Suncorp Portfolio Services Limited.

Their banking segment serves retail clients, as well as small and medium-sized businesses. It is a relatively small part of Suncorp and shifting the unit to ANZ could help them streamline focus on the insurance sector. Being at a smaller scale than the Big 4 banks means it has less funds to invest in upgrading platforms and capital available to back additional loans. This makes it hard to compete in certain areas of the banking industry.

9. Virgin Money UK PLC ($VUK)

Market Capitalisation: $3.97b

Stock price (as of 26/05/2023): $2.89

Stake Platform Bought / Sold (1 Jan 2023 - 26 May 2023): 55% / 45%

Virgin Money is a UK-based financial group with four main brands, Clydesdale Bank, Yorkshire Bank, B and Virgin Money. It was originally spun out of NAB in 2016 and is dual listed on the ASX and the London Stock Exchange as these businesses operate in the UK. Clydesdale is one of Scotland's largest banks. Similar to Yorkshire Bank, it provides retail and business banking services.

Virgin Money offers a wide range of products to customers across the UK. These include savings, mortgages, credit cards, currency services, pensions, investments and insurance. B is a mobile-app based banking service. Virgin's share price performance will be affected by general economic sentiments, interest rate decisions, regulations and banking sector risks in the UK. These are different drivers compared to Australia-based bank stocks.

10. Judo Capital Holdings ($JDO)

Market Capitalisation: $1.29b

Stock price (as of 26/05/2023): $1.17

Stake Platform Bought / Sold (1 Jan 2023 - 26 May 2023): 72% / 28%

Judo was founded in 2016 and is a challenger bank that aims to serve Australia’s small and medium enterprises (SMEs). It only received a banking licence in 2019 and is a legacy-free platform compared to the major banks. They offer loans for general business activity and equipment, as well as lines of credit. Judo can also provide certainty that a business is likely to make payments to landlords, customers and suppliers.

They are still a relatively small player and operate mostly along Australia's east coast. Judo needs to carry a higher proportion of capital reserves compared to the Big 4 banks and they don't have the same advanced levels of accreditation for risk assessment. This can limit its options at times, but management believes that its strategy of working with SMEs can be competitive. It can be harder to compete with scaling capabilities of large banks in other areas such as mortgages, which Judo doesn't provide.

What are the benefits of buying bank shares?

Some see bank shares as a relatively stable option that provides regular dividend payouts to shareholders. Some ASX bank stocks are well-known brands and are seen as integral to upholding the nation's financial system. They could see extensive government support in the case of a crisis in order to maintain the systems' stability.

Investors might want to look at the net interest margin of banks. This compares the total interest a bank generates from credit products like loans and mortgages, with how much it pays in outgoing interest, for offers like savings accounts. Banks tend to increase lending rates in line with RBA decisions, while the figures for savings and term deposits tend to lag.

This can help support their revenues in an environment with rising interest rates. However, some borrowers could struggle with repayments in this situation. Investors can also check whether bad debts are rising, with declining or delayed payments potentially becoming a larger problem for a bank. 

Which Australian bank stocks pay the best dividends?

As of 26 May 2023, Bendigo had a dividend yield of 6.41%. ANZ rewarded investors with 6.22%, while Virgin Money came third with 6.04%. Westpac and Macquarie were also above the 5% benchmark, with 5.98% and 5.44% respectively.

💡Related: Looking for other ASX dividend stocks?

💡Related: Top 10 Dividend ETFs in Australia

Bank shares FAQs

Are bank shares a good investment?

ASX bank stocks, especially the Big 4 banks, are known for relative stability and dividend payments. They tend to have to meet strict regulations and benefit from general economic growth. Banks can also pass on interest rate rises to customers.

The health of Australia's banks are closely tied to its housing market. There are also concerns about commercial real estate in various countries. The failure of several banks in the U.S. this year has provided a reminder of potential risks in the sector and how they could spread across the financial system. 

What bank ETFs on the ASX can I invest in?

There are several ETFs available that focus on the ASX banks and the general financial sector. These include VanEck Australian Banks ETF ($MVB), SPDR S&P/ASX 200 Financials ex A-REIT Fund ($OZF) and BetaShares Financials Sector ETF ($QFN). Investors should keep in mind that the size of the Big 4 banks means that they usually make up a considerable proportion of any ETF focused on ASX large caps.

This does not constitute financial product advice nor a recommendation to invest in the securities listed. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking appropriate financial or taxation advice before investing.

Portrait photo of Megan Stals, Market Analyst at Stake.

Megan Stals

Market Analyst

Megan is a markets analyst at Stake, with 7 years of experience in the world of investing and a Master’s degree in Business and Economics from The University of Sydney Business School. Megan has extensive knowledge of the UK markets, working as an analyst at ARCH Emerging Markets - a UK investment advisory platform focused on private equity. Previously she also worked as an analyst at Australian robo advisor Stockspot, where she researched ASX listed equities and helped construct the company's portfolios.


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