Bank shares have delivered in spades for investors in the past few years, spitting out big dividends alongside hefty capital gains.
Commonwealth Bank shares, for instance, were up 49 per cent over the last two years at the time of writing, trading above $80. And that gain doesn't include the $7.65 in dividends that shareholders have received over this period.
With performance like that, it's easy to see why the big four are a staple of many investors' share portfolios. The major banks are also very hard to avoid when they make up a quarter of the ASX 200.
Recently, however, something unusual has happened. Over the last four months or so, the banks have lagged the broader market. Since the beginning of May their share prices are up by 0.7 per cent, compared with a 3.2 per cent rise in the 200 biggest stocks.
This was bound to happen eventually, of course. And it's nothing serious compared with banks' longer-term superior share price performance.
Nonetheless, it raises some pertinent questions about the sector's outlook. While bank shares have had a golden run, some analysts reckon it will be a tougher road from here.
Andrew Martin, principal at fund manager Alphinity, says that for the past few years banks had a number of "tailwinds" working in their favour.
Problem loans have been falling to historic lows because fewer borrowers are defaulting.
A lack of strong competition meant banks were able to "re-price" home loan interest rates – a polite way of saying charge their customers more. Now, however, bad debts are probably near their low point, and the home loan market is more competitive.
"The tailwinds that they've had for the last few years just do not exist anymore," Martin says.
These trends were borne out in the latest results from the Commonwealth Bank in August. Westpac, NAB and ANZ, which measure profits over the year to September, revealed similar trends a few months earlier.
Credit Suisse analysts also said the big banks appeared to be in a "tougher revenue environment" after the latest round of profit updates.
While home buyers are keen to borrow, the analysts noted that revenue from many other customers is soft. Big companies are still shying away from borrowing – and the lack of volatility on financial markets means banks make less money from helping customers hedge against currency changes, for instance.
Yet another negative hanging over the banks is the prospect of tougher rules from the government's financial system inquiry.
To make the system safer, banks may be forced to run bigger capital buffers to help them weather economic shocks. This dampens returns. There's no guarantee these policies will change, let alone by how much, but the uncertainty of the inquiry is another "headwind" for the banks.
It's hardly panic stations for bank investors. Analysts expect the industry to keep on churning out higher dividends, underpinned by solid profit growth. The point is that they face a softer environment, which could make it tougher to achieve the bumper share price gains of recent years.