Macquarie cut Australian bank revenue forecasts

Investing.com -- Macquarie cut its revenue forecasts for Australian banks by 1-2% for fiscal year 2027 following weaker-than-expected August 2026 results, the firm said in a report.

The banks delivered revenues generally below consensus estimates by 0-2%, though lower costs helped offset some of the shortfall. Commonwealth Bank was the only lender to deliver an in-line underlying result, while peers missed consensus pre-provision operating profit by 1-2%.

Underlying margins improved but fell short of market expectations despite tailwinds from rate increases and replicating portfolios. Macquarie reduced its fiscal 2027 pre-provision operating profit estimates by 0-3%.

ANZ delivered a relatively better underlying result when excluding one-off items and markets income, while Westpac had the largest miss against consensus, according to the report.

Mortgage applications dropped 12-20% across all banks following the budget, with investor applications falling 17-28%. Industry feedback suggests the slowdown will likely continue through 2026.

Macquarie expects credit growth to slow toward 3.5% and projects margins will fall 3-5 basis points over fiscal 2027 as replicating portfolio tailwinds moderate from 2-8 basis points in fiscal 2026 to 3-4 basis points in fiscal 2027.

The firm maintains an underweight view on the sector and favors ANZ and National Australia Bank over Commonwealth Bank and Westpac.

You May Also Be Interested In

• Tesla readies August launch of CyberCab - The Information
• Western Digital (WDC) call put ratio 1 call to 1.2 puts on 57K contracts
• Canaccord Downgrades York Space Systems (YSS) to Hold, 'Supply chain and contract timing uncertainty'