Australian Banks Set to Report Strong Interim Results

Strategic Insights -

Australian bank analysts are tipping a strong interim performance from the country's largest banks, ANZ, Westpac, and the National Australia Bank, with an average profit increase of 13% forecast for the six months to March 31. Banks have managed to reduce bad debt charges while controlling costs and improving financial services performance. The results are expected to show strong non-interest income performance and improvement in margins from UK operations, given the higher interest rate regime.

Key Takeaways:

  • Three of Australia's largest banks, ANZ, Westpac, and the National Australia Bank, are set to report strong interim results, with analysts tipping an average profit increase of 13% for the six months to March 31.
  • ANZ is forecast to post a profit of $810 million, a 13% increase on the previous corresponding period, with forecasts ranging from $794 million to $825 million.
  • The National Australia Bank is forecast to deliver a $1.58 billion interim profit, 13.5% up from the previous corresponding period, with forecasts ranging from $1.55 billion to $1.64 billion.
  • Westpac is forecast to post a $790 million profit, a 12.6% improvement on last year, with forecasts ranging from $784 million to $804 million.
  • The banks have managed to reduce bad debt charges while controlling costs and improving financial services performance.
  • Analysts expect ANZ's focus on the retail banking sector to show strong sales numbers in the consumer banking division.
  • The National Australia Bank's results are expected to show strong non-interest income performance and improvement in margins from UK operations, given the higher interest rate regime.
  • Westpac's asset growth looks stronger, and it has more flexibility in provisioning and good cost control recently.
  • The market will be watching for further details of the National Australia Bank's integration plans for the MLC group, which it bought from Lend Lease for $4.56 billion.

Statistics:

  • Average profit increase forecast for the six months to March 31: 13%
  • ANZ's forecast profit: $810 million
  • ANZ's profit increase: 13% on the previous corresponding period
  • National Australia Bank's forecast profit: $1.58 billion
  • National Australia Bank's profit increase: 13.5% on the previous corresponding period
  • Westpac's forecast profit: $790 million
  • Westpac's profit increase: 12.6% on last year
  • National Australia Bank's MLC group purchase price: $4.56 billion

Sources:

  • Blair Speedy in Melbourne
  • Warburg Dillon Read analyst James Ellis
  • Melbourne analyst (unnamed)
  • Frank Cicutto's National Australia Bank
  • David McFarlane's ANZ
  • David Morgan's Westpac
  • Lend Lease