A good result, with the full year and 2H22 ahead of consensus (estimate comparable shown below) on most measures.

NIM’s expanded significantly in the 2H…

…a tailwind that should continue as the RBA hikes the cash rate.

At the sector level, capitalisation has improved dramatically from prior years.

Delinquencies remain low, and will likely stay low as long as the employment data remains strong.

Bank management teams are very aware of the optics about everything and anything to do with bank profits. Hence both WBC and ANZ, in our view, downplaying the cyclical strength in their commentaries, preferring instead to emphasise the robust degree of competition in the market, and pointing only to modest gains for themselves. It’s one of the few industries that cannot celebrate a tailwind.

Given we think the positive NIM pressure continues, that NIM’s will continue to widen, that competition if anything will probably reduce somewhat, as funding becomes more difficult to access, makes the banks appear favourably priced, in our view.

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

General Advice Warning: This document has been prepared without taking into account your objectives, financial situation or needs, and therefore you should consider its appropriateness, having regard to your objectives, financial situation and needs. Before making any decision about whether to acquire a financial product, you should obtain and read the relevant Product Disclosure Statement (PDS) or Investor Directed Portfolio Service Guide (IDPS Guide) and consider talking to a financial adviser.

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