Jefferies analyst Brian Johnson said this month’s earnings season could be weak for banks, but he was positive on CBA, arguing it was outperforming peers and had excessive loan loss provisions.
Some in the market are wary of CBA’s high valuation, with Citi saying in a recent note the bank was valued at a 100 per cent premium to peers, when judged on its return on equity. On Friday CBA had a market capitalisation of $159 billion, streaks ahead of the next most valuable Australian bank, NAB, worth $90 billion.
Barrenjoey analyst Jonathan Mott also said margins could be an area of disappointment in CBA’s result, and questioned whether the bank could come under pressure to follow rivals and start curbing costs more aggressively.
National Australia Bank will also release a quarterly trading update this Thursday, with markets expecting profits of about $1.6 billion, while ANZ Bank will on Monday provide a market update.
Macquarie Group chief executive Shemara Wikramanayake will provide a quarterly update this Tuesday, as part of an in-depth operational briefing. Morgan Stanley said Macquarie’s peers had reported strong December quarter results, though they say the comparable quarter from a year earlier benefited from a post-COVID rebound.
The country’s two largest home and motor insurers, Suncorp and Insurance Australia Group, also report their half-year results this week. Insurance premiums have been rising in recent halves, but some believe insurers’ margins could face pressure from rising costs of labour and materials.
