Jarden chief economist Carlos Cacho said the banks’ results would likely show a “resilient but muted” half,with the sector’s profits expected to fall 1 per cent to $15.6 billion.
Cacho said he expected a continued fall in the banks’ net interest margins – a measure of profit comparing banks’ funding costs with what they charge for loans – but at a slower pace,dropping 3 basis points over the half.
While mortgage competition – and especially discounts to retain customers – remain robust,he said competitive pressures were easing and that deposit pricing remained mostly unchanged.
Meanwhile,bad debts would remain relatively stable,Cacho said,against a backdrop of low unemployment and rising house prices.
‘The competitive behaviour is not as extreme now in mortgages,but there’s some competition on deposits.’
John Storey,UBS analyst
NAB will kick off the round of bank results when it reports its profits for the six months to March this Thursday.
Barrenjoey bank analyst Jon Mott said the banks’ revenues stabilised in the first quarter of this year,with that trend likely to continue through their first halves,following a set of disappointing results in the final six months of 2023.