Banks
CBA quarterly is out.
The banks are in rude health, for now. Profits are up on the back of NIM expansion and volume growth.
Credit quality remains sound. We knew this already, given the results from ANZ, WBC and the regionals.
Bank CEOs make a goodly lot of noise about how competitive the industry is, and, whilst not untrue, it is the case that NIMs have been pretty steady for a long time despite the rates headwind (ever lower rates for most of the past decade), and now they have a rates tailwind (mortgage rate repricing, which has further to run).
Banks are mindful of the optics of profit maximising, so they tend to stay fairly politic in their outlooks and comments.
We continue to see medium run risk from eventually higher BDDs, but we think we will see it coming first in downgrades from retailers.
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