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Big Four results: good, bad or mediocre?

It’s reporting season for Australia’s big banks – how do you think they will shape up against each other? Which one is better placed to ride out the economic storms ahead?

NAB has already reported a 10% fall in half-year cash profits to $2bn, with its UK and New Zealand businesses hit the hardest. And ANZ’s profits fell 28% in the first half as bad debts almost doubled.

But overall, the banks are due to deliver a combined profit of about $7.6bn, just 3.5% lower than their 2008 first-half figures.

Some analysts are, however, saying that these positive results disguise trouble ahead for the banks, which will soon be affected by a further increase in non-performing loans.

NAB is expecting at least another 18 months of rising bad debts as the domestic economy is ravaged by recession.

How do you think the Big Four banks will perform this year? Will they be laid low by lousy loans, or will they reap the rewards of increased market-share as global firms continue to struggle and regional banks fall victim to takeovers?

Comments (5)

  1. The Big Four have outperformed the S&P/ASX 200 index so far this calendar year – they remain well placed.

  2. Investors are keen their stocks at the moment – that should give hope to the Aus banks.

  3. At least our banks don’t need “stress testing”. There capital base remains much strong than in the US or UK.

  4. You got to be kidding me. They are having their own stress test. Most of the banks globally have exposure to toxic assets if not originated from the US it was originated locally. Remember negative gearing? Does it ring a bell?

    The question is will the government bail them out? I am not sure about that.

  5. I think l bloom_jasper’s comment make sense.

    This is probably why the banks all of the sudden was transparent on the way they calculate there cash reserve and profit. I remember in an article ANZ calculated its profit excluding credit derivatives.

    I think in the past all banks whether global or local did not capitalized well in their operation and risk management. This is why it has brought this perfect storm.

    What did ASIC do? This should have been regulated in the past.
    We heard ASIC in the past hired lawyers that once worked from the financial industry ie. BT Financial Group. We are just guessing this could have clouded the prudential regulatory judgment of ASIC lawyers.

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