In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to maintain its winning streak. The benchmark index is currently up 0.3% to 5,588.4 points.

Four shares that are climbing more than most today are listed below. Here’s why they are racing higher:

The Afterpay Ltd (ASX: APT) share price is up 3.5% to $44.41. Investors have been buying the payments company’s shares after the release of a U.S. update this morning. According to the release, the Afterpay platform has continued its meteoric growth in the market even during the pandemic. This has seen the number of active U.S. customer hit 5 million. Management revealed that 1 million of these have joined during the last 10 weeks.

The AMA Group Ltd (ASX: AMA) share price has jumped 5.5% to 68 cents. This gain has been driven by a market update from the crash repairer this morning. That update revealed that AMA is well-funded to support the business during an extended period of disruption. It also believes the headwinds it is facing now will soon turn to tailwinds and notes that vehicle travel levels are beginning to return to normal levels as restrictions continue to ease.

The NRW Holdings Limited (ASX: NWH) share price has rocketed 24% higher to $2.05. The catalyst for this strong gain has been a trading update by the infrastructure contractor. According to the update, NRW delivered unaudited revenue of $1.6 billion for the 10 months to April 30. This represents record revenue for the company compared to any previous full financial year. The company’s EBITDA came in at $177 million for the 10 months, pre-adoption of AASB16.

The Santos Ltd (ASX: STO) share price has stormed 3.5% to $5.30. This follows a jump in oil prices overnight after data revealed a surprise drop in U.S. stockpiles. It isn’t just Santos which is storming higher. The S&P/ASX 200 Energy index is up a solid 2% at the time of writing.

More reading

• ASX 200 down 0.2%: Afterpay hits a record high, Aristocrat Leisure update disappoints
• ASX 200 mining services share storms 27% higher on record revenue result
• Why I’d invest $1,000 in this ASX tech share today
• Afterpay share price on watch after hitting 5 million active US customers
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Afterpay, AMA, NRW, & Santos shares are racing higher appeared first on Motley Fool Australia.

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The biggest single risk factor facing the big four ASX banks may not be as worrisome as another growing threat.

While all eyes are on the large provisioning set aside by our largest mortgage lenders due to fears of consumer and SME loan defaults, its $63 billion of commercial property loans that’s keeping bankers awake at night.

This is according to a report in the Australian Financial Review quoting unnamed senior banking executives.

Dividend and earnings threat

This could be a surprise to many as the attention is placed on over indebted households and small businesses most exposed to the devastating COVID-19 shutdown.

This is why the National Australia Bank Ltd. (ASX: NAB) share price was under the most pressure during the coronavirus fallout as it is most exposed to small business lending.

But Westpac Banking Group (ASX: WBC), Commonwealth Bank of Australia (ASX: CBA) and Australia and New Zealand Banking Group (ASX: ANZ) are also under pressure with the big four collectively setting aside more than $5 billion to due with problem loans.

Loan provisions under threat

Provisioning may have to increase if commercial property loans become as big a risk factor as the AFR is suggesting.

That means the big dividend cuts we’ve seen over the past three months may be a more permanent feature than what many are forecasting.

Bankers are worried because large companies and multinationals may decide they do not need large expensive offices in the CBD anymore.

Structural risks to ASX banks

The COVID-19 lockdown that forced record numbers of Australians to work from home is driving this rethinking. Aussies are equally if not more productive working from home. Law practices, accounting firms and investment banks may be tempted to economise by saving on rent.

If this happens, landlords will be forced to write-down the value of their prime properties. This will be a problem for the big banks who are using these high-end addresses as loan collateral.

While the $63 billion worth of such loans sound tiny relative to the mortgage books of the big four (CBA’s alone is worth around $500 billion), it’s still potentially big enough to trigger an earnings collapse in bank profits.

Another overlooked risk factor

Meanwhile, there’s a second possible structural change looming. As highlighted in my article this week, mega mall operators could also be forced to change their business model as the coronavirus shut-in accelerated the shift to online shopping.

I suspect these shopping destinations have reached their peak in terms of their strategic value and we could also see write-downs in these assets.

Structural change takes years to manifest. The fact that bankers are already starting to worry about some of these trends is a warning to investors not to take their eye off these emerging challenges.

More reading

• ASX 200 down 0.2%: Afterpay hits a record high, Aristocrat Leisure update disappoints
• Are CBA shares a 2020 dividend trap?
• Are NAB shares a bargain buy?
• Why the Commonwealth Bank share price is the best buy among the Big 4 banks
• ASX 200 down 0.2%: Big four banks lower and TPG announces demerger plans

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking. Connect with me on Twitter @brenlau.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post The hidden threat to big banks that may be worse than a housing collapse appeared first on Motley Fool Australia.

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