Australia’s Big Four Banks remain the backbone of the ASX in 2026. Collectively capitalised at ~$700bn, they continue to generate some of the largest profits in corporate Australia and remain the most reliable dividend payers in the market. At the same time, they are among the most heavily regulated and scrutinised institutions in the country; a reality that shapes both their strategic decisions and their investment appeal.
So of all the big four banks, which one is the best? Ultimately, we think the answer comes down to an individual investor’s objectives.
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First published March 2023. Last updated April 2026.
What are the Big Four Banks?
The term ‘Big Four Banks’ alludes to the Commonwealth Bank of Australia (ASX:CBA), Westpac Banking Corporation (ASX:WBC), Australia and New Zealand Banking Group – or ANZ Bank for short – (ASX:ANZ) and National Australia Bank (ASX:NAB).
These banks hold the largest majority of loans and deposits in Australia and all have an ‘oligopoly’ market position. As a result, Australian consumers have a love-hate relationship with them.
There is a lot of debate as to where Macquarie (ASX:MQG) sits. Some argue the term ‘Big 5’ should be used with Macquarie included, especially given it is growing its retail banking business. Others argue its legacy of being an institutional investor first means it belongs in a different class, and for now we’d lean towards the former view.
Which of the Big Four Banks is the biggest?
CBA remains the clear heavyweight. As at early 2026, its market capitalisation sits over $300bn, dwarfing its peers (none of the others are above $200bn). It also leads in home loan balances, business transaction accounts and payment terminals. Its home loan book now exceeds $620bn, with owner‑occupiers representing the majority.
The gap between CBA and the rest of the sector has widened over the past decade. Investors have rewarded its consistency, technology leadership and ability to defend margins even in competitive environments. Whether that premium is justified is another question entirely; but the market has made its view clear.
The State of the Market The Big Four Banks Operate In
For the sake of investors that have been living on Planet Mars for the past few years, let’s recap how the big four banks have performed.
The COVID‑era rate cuts pushed interest rates to record lows, only for the RBA to reverse course aggressively from 2022 to 2023. More than a dozen consecutive rate hikes flowed directly through to borrowers, and while many feared a wave of mortgage stress, households prioritised repayments above almost everything else.
At first glance, rising rates should have been a tailwind for the banks. Higher variable rates, fixed‑rate rollovers and expanding net interest margins all pointed to stronger earnings. But two counterforces emerged. First, competition for home loans intensified, with banks discounting heavily to retain or win customers. Second, deposit rates had to rise as well, compressing margins and increasing funding costs.
Now, in 2026, the environment has shifted again. Rates have eased from their peaks but remain well above pre‑COVID levels. Deposit balances have normalised as households draw down savings accumulated during the pandemic. The “new normal” is neither the ultra‑low‑rate world of 2020 nor the tightening cycle of 2023; it is a middle ground where margins are stable but not expanding, credit growth is modest, and regulatory scrutiny remains intense.
The state of each of the Big Four Banks
Over the past year, CBA has gained 44%, Westpac 20%, NAB 9% and ANZ has been broadly flat. Over five years, the divergence is even more striking: CBA is up 155%, NAB 92%, Westpac 70% and ANZ 47%.
CBA’s performance for a time became something of a local “GameStop saga”. Analysts repeatedly argued it is overvalued, yet retail investors have continued to buy it for its stability, brand strength and dividend reliability. When a stock keeps rising despite valuation concerns, who looks foolish — the buyers or the sceptics? In our view, the answer depends on your time horizon. Shares fell from all time highs but momentum sped up in February 2026.
NAB has been the second‑best performer over five years. After being heavily scrutinised during the Royal Commission, it rebuilt credibility under Ross McEwan, strengthened its business banking franchise and returned its home loan division to growth. Momentum has slowed since McEwan’s departure, but the bank remains operationally solid.
Westpac and ANZ have lagged for much of the past decade. Westpac struggled to regain investor trust after its $1bn AUSTRAC fine in 2020, but the tide has turned. CEO Anthony Miller has rationalised brands, pushed to increase the proportion of mortgages sourced in‑house rather than through brokers, and advanced the “Unite” program to consolidate legacy operating systems. The market has begun to reward this progress.
ANZ, meanwhile, lost ground due to technology delays and its exposure to a softer New Zealand economy. But the launch of ANZ Plus has finally modernised its retail offering, and performance has stabilised over the past 18 months.
Which of the Big Four Banks offer the best prospects?
This is where things get interesting. All four banks are expected to grow earnings per share over the next two years, although the pace varies. Consensus forecasts point to CBA delivering around 5% EPS growth, with NAB and ANZ slightly behind and Westpac broadly flat.
CBA will continue to pay the highest dividend per share, although not the highest yield. ANZ currently offers the most attractive yield at roughly 5.7% (assuming an 80% payout ratio), with Westpac at 4.7%, NAB at 4.4% and CBA at 2.7%.
A valuation perspective tells a different story. CBA trades at a significant premium, with analysts assigning a median price target roughly 30–35% below the current share price. NAB and Westpac are priced around 10% below consensus targets, while ANZ is considered fairly valued with a small premium.
On multiples, ANZ is the cheapest at ~12.7x earnings, followed by Westpac and NAB around the mid‑16s, and CBA at the top of the range.
So which is “best”? In our view, it depends entirely on what you want. CBA leads on stability and brand strength; ANZ leads on valuation and yield; NAB offers a balanced profile; Westpac offers turnaround potential.
Conclusion about the Big Four Banks
Which Big Four Bank Stock should investors buy? In our view, it is not as easy as saying ‘one fits all’. We think investors should start with their objectives rather than the banks themselves.
If you want short‑term stability and are willing to pay for it, CBA remains the default choice. If you want long‑term growth at a reasonable price, ANZ is the more compelling option. Dividend‑focused investors may gravitate toward CBA for its consistency or ANZ for its yield.
Ultimately, the best bank is the one that aligns with your risk tolerance, income needs and investment horizon. The Big Four will continue to dominate Australian finance, but they will not deliver identical outcomes. Understanding their differences — in valuation, strategy, technology, and earnings momentum — is the key to choosing the right one for you.
Considering all these factors will provide an indication of which of the Big Four Bank stocks could be most beneficial for you as an individual investor.
