Big banks shares are wildly popular with retail and institutional investors alike thanks to their perceived reliability and big fully franked dividends.
And if the analysts at investment bank Goldman Sachs are on the money it's time to buy National Australia Bank Ltd (ASX: NAB) shares.
On December 5 they issued a new research note considering the implications of the RBNZ's new common equity tier 1 (CET 1) capital requirements imposed on authorised banks in New Zealand.
The banks have seven years to comply with the new requirements and Goldman's thinks NAB will only have to make 'minor adjustments" to the way it streams capital from the NZ subsidiary to the core group. Goldman's also believes NAB's 'group dividend settings' should be 'sustainable'.
This is a positive outcome given the tough circumstances of much higher new capital reserve requirements and helps the analysts have confidence in maintaining a 'buy' rating on NAB.
Goldman's has a 12-month price target of $30.71 on NAB shares, which means shares have some 20% upside potential over the 12 months ahead.
Elsewhere it has a 'sell' rating on CBA (ASX: CBA) shares.
