Large Australian Banks Post Solid H122 Results; Credit and Cost Performance Varies
DBRS Morningstar has published a commentary discussing large Australian banks’ recent H1 2022 results, including Australia and New Zealand Banking Group Limited, National Australia Bank Limited, and Westpac Banking Corporation.Key highlights:
• The three large Australian banks reported solid results in the first half of 2022, supported by resilient revenue generation.
• Loan loss provisions and operating costs performance, however, varied across the banks.
• Asset quality remains robust for the three Australian banks, and NPLs and NPL ratios have now returned to pre-pandemic levels.
• Capital positions are sound, despite increased new minimum regulatory requirements.
“Despite the global operating environment becoming more challenging due to persistent domestic labour and supply shortages, increasing inflation and the Russia-Ukraine conflict, we expect the large Australian banks to continue to report strong asset quality and earnings, supported by higher net interest income on the back of recent interest rises and good cost discipline” said Maria Rivas, Senior Vice President, Global FIG.
Australia and New Zealand Banking Group provides a range of banking and financial products and services to retail, small business, corporate and institutional clients. Co. operates on a divisional structure with six divisions: Australia, Institutional, New Zealand, Wealth Australia, Asia Retail & Pacific and Technology Services & Operations and Group Centre. Co.'s core products offered include deposits, credit cards, loans, investments and insurance, retail products provided to consumers, and banking and financial solutions provided to business customers through managers, among others. As of Sept 30 2015, Co. had total assets of A$914,869,000,000 and total deposits of A$566,847,000,000.
National Australia Bank provides banking services, credit and access card facilities, leasing, housing and general finance, international banking, investment banking, wealth management, funds management, life insurance and custodian, trustee and nominee services. Co.'s division include: Australian Banking, which provides products and services to retail and business customers; National Australia Bank Limited Wealth, which provides superannuation, investment and insurance solutions; and New Zealand Banking, which comprises the Retail, Business, Agribusiness, Corporate and Institutional and Insurance franchises in New Zealand. As of Sept 30 2016, Co. had total assets of A$777.62 billion.
Westpac Banking is a banking organization with branches, affiliates and controlled entities throughout Australia, New Zealand, Asia and in the Pacific region. Co. provides a range of banking and financial services in these markets, including consumer, business and institutional banking and wealth management services. Co. is engaged in the provision of financial services including lending, deposit taking, payments services, investment portfolio management and advice, superannuation and funds management, insurance services, leasing finance, general finance, interest rate risk management and foreign exchange services. As of Sep 30 2017, Co. had total assets of A$851,875,000,000.
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