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.
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