Macquarie Group Ltd (ASX: MQG) shares and National Australia Bank Ltd. (ASX: NAB) shares are perhaps my favourite ASX bank shares.
I know what you are thinking:
What about Commonwealth Bank (ASX: CBA) and Westpac (ASX: WBC)?!
It's true that these two major banks have been Australia's best-performing, capturing the largest share of mortgages, increasing their dividends and growing profits furiously.
Nonetheless, I like Macquarie Group and NAB shares for the following reasons…
Macquarie Group
Macquarie is Australia's premier investment bank. Investment banking is different from traditional banking like mortgages, savings accounts and loans. Investment banking is more about corporate style banking, such as mergers and acquisitions, debt funding; infrastructure management; investments; and leasing. These can be extremely profitable forms of banking, at the right times.
Macquarie also has a retail banking arm, where customers can get mortgages and the like. But it is Macquarie's global exposure and differentiated banking which appeals to me. As with NAB, I think an investment in Macquarie shares offers exposure to global markets and local banking, without undue concentration to Australia's burgeoning household debt.
However, parts of Macquarie's business can be intensely cyclical. Therefore, it is important to remember that patient investors will likely be rewarded with a better opportunity to buy shares sometime in the future.
That's why I'm waiting for a lower price before buying in.
NAB
As Australia's fourth-largest bank, NAB has its fingers in many pies. In addition to offering traditional banking solutions like mortgages, credit cards and car loans, NAB is a leading business bank. It controls over 20% over the local market.
While NAB has drastically underperformed some of its peers over the long run, it has taken strides to de-risk its business by selling some underperforming assets, like its overseas interests.
In my opinion, the combination of its refined focus on Australia and New Zealand together with its presence in business banking bode well for its longer-term returns. It also offers a handy dividend.
Foolish Takeaway
Australia's bank shareholders have been rewarded many times over for their patience. For my money, I think NAB and Macquarie appear well-placed for the next decade.
However, I would like to buy their shares at lower prices.
