The banking sector has been on form this year and, along with the mining sector, has helped drive the S&P/ASX 200 Index (ASX: XJO) notably higher.
Positively for investors, analysts are still seeing plenty of value in the sector, particularly for those in search of income.
For example, two ASX bank shares that have recently been given buy ratings are listed below. Here's what you need to know about them:
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Australia and New Zealand Banking GrpLtd (ASX: ANZ)
The first ASX bank share to look at this month is Australia's fourth largest bank, ANZ.
ANZ has rebounded very strongly from the pandemic. For example, during the first half, the company reported a statutory profit after tax of $2,943 million and cash earnings from continuing operations of $2,990 million. This was up 45% and 28%, respectively, on the second half of FY 2020.
This appears to have impressed analysts at Morgans. The broker currently has an add rating and $34.50 price target on its shares. This compares to the latest ANZ share price of $28.50.
As for dividends, Morgans is forecasting fully franked dividends per share of 145 cents in FY 2021 and 165 cents in FY 2022. This implies potential yields of 5.1% and 5.8%, respectively.
Westpac Banking Corp (ASX: WBC)
Another ASX bank share that has been performing strongly in FY 2021 is Westpac. Like ANZ, it reported a significant increase in profits during the first half of its financial year.
For the six months ended 31 March, Australia's oldest bank reported cash earnings of $3,537 million. This was a 256% increase over the prior corresponding period and a 119% lift over the second half of FY 2020.
Goldman Sachs has been pleased with its performance. So much so, it currently has a buy rating and $29.03 price target on its shares. This compares favourably to the current Westpac share price of $25.12.
The broker is also forecasting generous dividend yields in the near term. Based on where its shares trade today, Goldman expects yields of ~4.7% and ~5% in FY 2021 and FY 2022, respectively.
