Opal Capital chief investment officer Omkar Joshi said banks had benefited from low numbers of customers in financial stress and solid credit growth, while the sectors’ profit margins had also proven resilient. “They are kind of boring right now, which is exactly how you want them,” Joshi said.
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A key point of interest is likely to be banks’ net interest margins, which compare the cost of funds with what banks charge for loans. Despite competition in home lending from the likes of Macquarie Group, Joshi said the major banks had generally managed to stabilise margins recently.
“They have enough ability to manage margins both on the lending side, and on the deposit side. It’s a pretty rational mortgage market as well,” he said.
Citi analyst Thomas Strong said banks were in an “almost Goldilocks-type revenue environment”, as credit growth had been much stronger than expected, while he also noted the sector’s focus on cost control. He said the “wildcard” was likely to be bad debts, which have remained at historically low levels, benefiting the banks’ bottom lines.
Westpac is expected to deliver cash earnings of $6.8 billion on Monday, which is down slightly compared with last year, according to market analysts’ estimates.
Meanwhile, NAB is expected to make $7.1 billion, which is virtually flat compared with 2024.
Analysts expect ANZ will chalk up about $6.3 billion from continuing operations for the year, though other measures of profit that include “significant items” will be lower than this. On Friday, ANZ said its cash and statutory profit would take an after-tax hit of $1.1 billion from previously announced redundancies, a $240 million penalty to settle four regulatory lawsuits and the shutting down of the online shopping rewards platform Cashrewards.
CBA, which reports its numbers over a financial year ending on June 30, said in August that its full-year profits rose 4 per cent to $10.25 billion compared with last year.
All up, the major banks are expected to deliver cash profits of slightly more than $30.6 billion, according to consensus figures cited by UBS. That is similar to the $30.7 billion the big four made last year.
