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Australia Banking Outlook: Credit Slowdown And Margin Pressures Are Likely To Dampen Earnings Growth Jun 11
Standard & Poors, June 2011
Abstract
Australia's four major banks have solid earning prospects, albeit not at the stellar levels seen before the global financial crisis, in Standard & Poor's Ratings Services' opinion. We consider that while loan loss provisions are likely to remain low by international standards, cautious consumer sentiment, intensifying competition for retail deposits, and stricter regulatory requirements may dampen lending growth and profit margins in the sector. Nevertheless, we expect that the credit profile of Australia's banking sector would remain sound, supported by the banks' conservative risk appetite and good capitalization, and the country's strong economic outlook. Although the country's economic growth outlook and employment remain robust, the economic momentum varies across the country. This is due to the two-speed effect of a...
Companies mentioned in this report are: National Australia Bank Ltd.,Australia and New Zealand Banking Group Ltd.,Westpac Banking Corp.,Commonwealth Bank of Australia,Rabobank Australia Ltd.,Macquarie Bank Ltd.,Bank of Western Australia Ltd.,Suncorp-Metway Ltd.,Citigroup Pty Ltd.,Bank of Queensland Ltd.,HSBC Bank Australia Ltd.,ING Bank (Australia) Ltd.,Bendigo and Adelaide Bank Ltd.,AMP Bank Ltd.,Members Equity Bank Pty Ltd.,Rural Bank Ltd.,Macquarie Group Ltd.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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