Big four bank earnings: The key numbers to watch for CBA, Westpac, ANZ and NAB half-year results
Bank earnings, starting May 5 with Westpac, will showcase key numbers amid expected rate cuts, high valuations and economic volatility.
Mentioned
KEY POINTS
- Australian banks’ financial results, starting May 5 with Westpac, will highlight key metrics amid expected rate cuts and economic volatility
- The sector has outperformed the ASX 200, up 2.5% year-to-date, but faces headwinds from three anticipated 25-basis-point rate cuts by year-end, pressuring net interest margins
- UBS forecasts modest earnings growth for Westpac (2.8% YoY) and ANZ (0.2% YoY), but a 2% decline for NAB, with focus on capital ratios and cost management
- Westpac and Bank of Queensland are stocks to watch for potential upside, while ANZ’s Suncorp integration and bond scandal fallout are key risks
- Valuations are high at 19.5x FY26 earnings, but sector stability supports banks as a relative safe haven
Australian banks are set to report their financial results starting May 5, with Westpac kicking off the season. Despite a lackluster first quarter marked by weaker-than-expected net interest income and capital ratios, the sector has outperformed the broader market, up around 2.5% year-to-date compared the S&P/ASX 200 index's flat performance.
S&P/ASX 200 Financials Index (green) vs. S&P/ASX 200 (blue) | Source: TradingView
The earnings will offer investors insights into key metrics as banks navigate an impending rate cut environment and volatile macroeconomic conditions.
The Backdrop
The financials sector has held up relatively well year-to-date, with resilience stemming from stable returns on equity and a favorable economic backdrop that has kept credit losses and unemployment risks low. Commonwealth Bank of Australia, ANZ and Bank of Queensland have led the pack, with share price gains of around 10%, 6%, and 11%, respectively. In contrast, Bendigo and Adelaide Bank and Macquarie have underperformed this peer group.
Year-to-date performance for Bank of Queensland (green), CBA (orange) and ANZ (blue) vs. Macquarie (purple) and Bendigo Bank (red) | Source: TradingView
The sector is set to face headwinds in the second half of 2025, with bond markets currently pricing in three 25-basis-point rate cuts by year-end. These cuts are expected to pressure net interest margins and earnings, with limited relief from already low bad debt charges. Despite this, the financials sector has held firm, up around 5% over the past month and trading at a slight premium to the ASX 200, a shift from its historical 13% discount to the index
Reporting Season Calendar
Earnings forecasts
UBS expects the majors to report the following numbers (ex-CBA) for their upcoming first-half results.
Earnings ($m) | ANZ | NAB | WBC |
|---|---|---|---|
Cash NPAT | 3,532 | 3,476 | 3,437 |
% growth YoY | 0.2% | -1.8% | 2.8% |
Cash EPS (cps) | 118 | 111 | 103 |
% growth YoY | 1.4% | 0.3% | 3.5% |
Net interest margin (%) | 1.59% | 1.72% | 1.94% |
Dividend (cps) | 83 | 85 | 80 |
% growth YoY | -0.1% | 1.5% | -10.9% |
Source: UBS
Focus Points
Westpac is a key watch. UBS forecasts a first-half cash net profit after tax of $3.5 billion, a 9.9% return on equity, and a CET1 capital ratio of 12.2%. The bank’s IT transformation and new executive hires, including a former NAB CFO and a Chief Transformation Officer, have bolstered market confidence. However, a 4-basis-point drop in net interest margin and a lower-than-expected CET1 ratio in the first quarter may signal potential volatility.
NAB is projected to deliver a $3.5 billion NPAT, down 2% year-on-year, with a CET1 ratio of 11.6% recovering from first-quarter weakness. Asset quality concerns and executive turnover, including a new CFO, have tempered optimism.
ANZ faces a softer outlook, though UBS is 1% ahead of consensus on pre-provision operating profit. The integration of Suncorp Bank and updates on ANZ Plus client migration will be key, alongside fallout from a bond trading scandal and a A$250 million capital add-on from regulators.
Stretched Valuations vs. Safe Haven Status
With banks trading at 19.5x FY26 forecasts and 2.3 times price-to-book value, valuations are stretched but supported by sector stability.
The market will focus on net interest margin trends, cost management, and capital strength as banks adapt to the looming lower interest rate environment. While CBA remains the bellwether, UBS notes that Westpac’s potential re-rating and Bank of Queensland’s likelihood of exceeding expectations make them stocks to watch.
For now, Australian banks remain a relative safe haven, but the road ahead hinges on their ability to balance margin pressures with strategic execution.
