Analysts watching for signs of resilience as sector faces profitability challenges
Australia’s major banks will reveal their latest financial results starting the upcoming week, offering investors insight into how the sector is navigating global uncertainty and margin pressure.
The country’s banking stocks have outperformed the broader market this year, with a key banking index up 2%, reflecting investor appetite for perceived stability amid geopolitical tensions and tariff-related volatility. However, analysts suggest the upcoming May earnings season could challenge that sentiment.
According to Morgan Stanley, banks will need to show “stable margins, single-digit loss rates and better capital ratios” to support further gains. At the same time, concerns are mounting that additional provisions tied to global risks, along with expectations of further interest rate cuts, could compress profitability across the sector.
Three of the country’s largest lenders — Westpac Banking Corp., National Australia Bank (NAB), and ANZ Group Holdings — will post half-year earnings this month. Commonwealth Bank of Australia (CBA) is scheduled to release a trading update, while Macquarie Group will announce its full-year results.
Westpac’s financial update will be closely analysed following a disappointing February statement that triggered a drop in its share price. Ongoing headwinds in the mortgage sector remain a challenge.
Morgan Stanley noted that markets will be attentive to “business bank loan growth, mortgage competition, deposit mix shift and the impact of lower rates.” The bank also flagged a $140 million reduction in first-half net profit after tax due to hedging-related movements.
Despite recent concerns, options data show that investor protection against share price declines has fallen to its lowest since November, signalling renewed optimism. Westpac will report on Monday, May 5.
NAB, meanwhile, will face scrutiny over leadership stability after chief financial officer Nathan Goonan stepped down. Analysts at UBS have flagged concerns over asset quality trends, which they say appear weaker than expected. Like its peers, the bank is also contending with fluctuations in its net interest margins. NAB is set to release its results on Wednesday, May 7.
ANZ’s upcoming earnings will precede the arrival of new CEO Nuno Matos, and markets will be watching for early indications of a shift in direction.
Citigroup recently upgraded the bank’s rating to neutral, suggesting that the risks tied to leadership transition have now been largely factored into the stock’s valuation. Progress on integrating Suncorp Group’s banking division and the related capital implications will also be key focus areas. ANZ is due to report on Thursday, May 8.
Macquarie’s global exposure has left it trailing other major banks in 2025, with shares down 13% year to date. The group recently divested its US and European public asset management units to Nomura Holdings Inc., marking another step in its strategy to pursue higher returns.
UBS analysts say the company’s investment outlook hinges on asset sales, capital deployment, and performance fees, while noting that sustainability of commodities and global markets profits will be critical. Macquarie’s full-year results are expected on Friday, May 9.
CBA will deliver its third-quarter trading update on May 14, with high expectations given its premium valuation. Barrenjoey analysts noted that the bank has “no room for error” and any update will be judged closely on margin trends and revenue growth.
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