Which ASX Big Four Bank Stock to Buy?

Let’s take a look at a question many investors would ponder: Which ASX Big Four Bank Stock to Buy? If you’re not invested in a Big Four Bank, you’re missing out on among the most reliable dividend payers and bumper profit makers – not necessarily from a margin perspective, but from raw numbers (CBA makes over $10bn a year). And while many have said they were overvalued, the market meltdown over Trump tariffs has led to a rare opportunity to pick one of them up at a discount.

But which one to choose? At first glance, there may appear to be little difference other than branding. Yes, CBA does appear to be ‘bigger’ than its peers, but is there anything else different about them. There actually is if you go beyond scratching the surface.

In this article we will answer that question. But first, acknowledging many are looking for different traits amongst bank stocks, we’ll look at each individual bank and provide one reason to buy each individual Big Four Bank as well as one reason not buy that Bank. Then we’ll look at our favourite right now.

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CBA (ASX:CBA)

Why you might buy CBA?

Where do you start? There are plenty of obvious reasons including CBA’s loan book and market presence. And probably the most important is its high dividends, of over $4 a share consistently.

But if we had to pick one thing that may not stand out at first glance, it is that the bank generates a far lower proportion of its loans from mortgage brokers, and a higher amount in house. And this means more money the bank keeps on account of not having to pay trailing commissions.

Mortgage brokers might appear to be a necessarily evil that the big four banks need to live with, or miss out on a larger number of customers. After all, they write nearly three-quarters of all loans in Australia. CBA makes far less of its book from brokers compared to its Big Four peers – just 33% in the most recent 6 month period.

Moreover, the bank is looking to increase it by upping its digital loan capabilities (particularly through its BankWest brand) and by luring ex-brokers in house with base salaries of up to $150,000 and potential for further bonuses. With a loan book that surpassed $600bn in September and is growing at 1.2x the rate of the market, this company is one that is walking the walk.

Why you might not buy CBA?

The only real reason not to is be that some say CBA is overvalued, and you might believe naysayers are right and that it would be better to buy another Big Four Bank. Now, there is less talk about that in light of the bank’s fall in light of the market sell off, but it is worth pondering this question. This could be a chance to buy the biggest Big Four Bank at a bargain price, but it could also represent a ‘falling knife’.

CBA skeptics have legitimate points to boast of including the lack of profit growth to justify its valuation, that its multiples (particularly P/E and P/B are ahead of its peers) and certain technical indicators. Conversely, there were reasons you could justify its valuation including its bumper profits.

We stated last November that for CBA shares to fall significantly there’d have to be some doomsday scenario. Well, it only took the President of the United States appearing keen to bring global trade back to 1930s levels for CBA to fall, so we were right there.

But ultimately, we might leave this question with a quote from Warren Buffett. ‘Price is what you pay value is what you get’. It is easy to look at the bank’s market capitalisation and share price, but it is important to look at all the other factors, those mentioned above and others. And of course, the same goes for all other Big Four Bank stocks.

Westpac (ASX:WBC)

Why you might buy Westpac?

Westpac’s relatively new CEO Anthony Miller is putting his stamp on the Big Four bank and looking to outperform where the bank has underperformed in years to come. These have included brand rationalisation, a pursuit to grow the proportion of mortgages on its book generated in-house (i.e. without brokers) as well as a project by the name of Unite. It will cost $3bn over this and the following 3 financial years but will unite the >100 operating systems across Westpac’s core brand and others (i.e. St George, BankSA, Bank of Melbourne). 

Why you might not buy Westpac?

Well, for a start, Westpac has run the most afoul of regulators this decade, copping a $1bn+ fine in 2020 for breaches of AML/CTF laws. That was five years ago you might say, but it has been closely watched since to implement changes. Moreover, if we had to bet our life savings on which bank will next run afoul of regulators, we would say Westpac.

Have you heard of Project Sentinel? It is a deep dive review of mortgages that the bank originates in house, with concern that some borrowers may have misrepresented income and other crucial information.

Last year, Westpac’s RAMS franchise was closed to new business after a regulatory probe, and these issues triggered the current review. And last week, it sold $21.4bn of loans written through RAMS at a loss to a consortium led by Pepper (ASX:PPM). ASIC is continuing to investigate what may or may not have gone on at RAMS.

But the biggest thing of all is that it lost the most mortgage market share of any major bank over the last 12 months. And while the bank is looking to win a higher share in loans amongst property investors (with only 39% of its loans written now going to investors), execution will be key.

Moreover, even though the company’s recent results were well received, investors should be concerned that revenue only grew 3% but expenses rose by 9%. Yes, some of this was redundancy costs, but technology costs were a part of it too (it spent $1.9bn, up 9% in a year). We also would note that interest-only loans rose by almost 20% vs 12% in the broader industry.

ANZ (ASX:ANZ)

Why you might buy ANZ?

For a start, ANZ is the cheapest bank (by P/E multiple at 16.4x and market capitalisation at $110bn) even though shares are at a 10-year high. And ANZ arguably has the most catalysts for top and bottom line growth in the short to medium term. The three key steps are the integration of Suncorp’s retail arm with ANZ’s, a step that’ll add 1m customers, the rollout of ANZ Plus and CEO Nuno Matos’ restructuring plans.

This is 35% cheaper to run than legacy technologies and the savings (in money and time) could be passed onto customers. By the end of 2026, it is anticipated that the entire retail bank will be on Plus which should be at least 7m customers (6m with ANZ prior to the Suncorp acquisition and 1m with Suncorp before the acquisition). 

The central promise of the platform was that would-be mortgagees could apply for loans on their phones and finalise in less than an hour.

But Nuno Matos’ restructuring plans give optimism that this bank has the best (even if by best you’re only judging easiest for the layperson to understand) plan for growth. While not promising anything too specific to the top or bottom lines (but he did want the cost to income ratio to be similar to CBA by 2028), he unveiled a plan to increase the number of bankers while cutting other jobs (3,500 to be exact). As with its peers, it wants to cut the reliance on business generated by brokers.

Why you might not buy ANZ?

Well, these plans could backfire and we’ve all seen this happen with ANZ before (i.e. in the mid 2010s, it wanted to build a retail network in Asia) and the consequences. It may seem a paradox to cut staff but also invest in them, bossting lenders at it branches.

ANZ has over exposure to New Zealand with 17% of revenue from there, and that it operates in its own right rather than through an independent subsidiary, plus that it has a significant market share with over 25% in loans and deposits. That is a higher share than even CBA has in loans in Australia. Meanwhile, in Australia, it has just a 13.5% share of mortages (the lowest of any of the Big 4). 

The New Zealand economy is not in good shape right now, and we wouldn’t be surprised to see an impact. Already the bank noted that lending in New Zealand was subdued in a very competitive market, due to a combination of lower commercial property lending and customers remaining cautious about taking on more debt.

NAB (ASX:NAB)

Why you might buy NAB?

NAB has a huge business bank, standing at A$230bn and representing a market share of 22%, greater than any of its Big Four peers even CBA. As interest rates decline, businesses will be more eager to take on debt and NAB is well poised to win over this business, better than any of its Big Four peers. 

Moreover, it is growing its retail traction faster than any other bnak with cash eanrings rising 10%. It grew owner occupied loans by 4.1% and investor loans by 5.7%. While loans written through its own channels is in the minority at 41.4%, it was ahead of 35.4% a year ago, and the company is pushing to grow this further.

Why you might not buy NAB?

The business bank is also a reason not to buy NAB. Or more specifically, the fact that it is facing big competition. In 2024, NAB wrote $5bn fewer business loans in 12 months, saw an 0.7% market share retreat as other Big Four Banks and other smaller banks like Judo (ASX:JDO) pick up market share. Moreover credit quality is deteriorating due to supply chains. 

Things haven’t gotten better in 2025. Yes, business lending grew overall by 17% and it has a 22% market share, it has had to invest a lot to keep market share and it NIM has fallen. Westpac grew business loans 15%, far faster than mortgages.

Moreover, of all the Big Banks, we’d say if there was one not to buy because of the CEO, it is NAB. It was always going to be tough to succeed Ross McEwan but Andrew Irvine has come under a lot of scruitany over certain allegations of his behaviour and his management style.

Even when he appears in headlines for reasons where he personally isn’t accused of doing anyting wrong, it is not because of the bank’s financial performances or innovation. In recent days, he’s made headlines about his work from home stance (which is to consider requests on a case by case basis).

But that aside, we reckon if the ship was alright, no one would care. Hang on, isn’t the bank walking the walk with these results and are we not just fearmongering that it could lose share in business lending? And will work from home really be an issue: can’t the bank just fund people who will work for it and show up to the office? Maybe talk it could lose its share is speculating and that latter question can be answered in the affirmative.

Nonetheless, recent comments that NAB didn’t want to be,’ lurching from one strategic initiative to another’, arguably led to perceptions that the bank didn’t have plans to differentiate itself, or even grow.

So, Which ASX Big Four Bank Stock to Buy?

If you want dividends, there’s no question that CBA is the Big Four Bank Stock to buy. It arguably offers the most upside potential right now, as it could retrace back to levels seen earlier this year before the Trump tariffs caused a major market sell off. If you want stable growth over a few years, ANZ has the most potential of all Big Four Bank Stocks given the roll out of ANZ Plus.