Big Four Banks: Earnings season preview and margin watch

Australia big four banks enter earnings season with net interest margins under the microscope. After a period of expansion driven by rate hikes, the question now is whether margins can hold as deposit competition heats up and mortgage repricing plateaus.

CBA is expected to lead on return on equity, supported by its digital banking edge and sticky retail deposit base. NAB business banking franchise should deliver steady growth, while WBC and ANZ focus on cost discipline and portfolio simplification.

Credit quality is the key swing factor. Arrears have ticked up modestly in housing and SME lending, but remain well below cycle averages. Our models suggest provisions are adequate barring a sharp macro deterioration.

Dividend announcements will attract attention. All four banks maintain strong capital ratios above regulatory minimums, leaving room for stable or modestly higher payouts.