Australia’s rebounding economy to boost bank earnings

 Australia’s rebounding economy to boost bank earnings

The ongoing earnings recovery at Australia’s major banks may gather steam as the economy bounces back from its first recession in 30 years and global demand for commodities such as iron ore, copper and natural gas rises.

Three of Australia’s major banking groups reported improved cash earnings for the fiscal first half ended March 31, helped by the country’s economic recovery from the COVID-19 pandemic and lower notable charges. Australia and New Zealand Banking Group Ltd., Westpac Banking Corp. and National Australia Bank Ltd. all said that credit impairment writebacks boosted their profits in the period.

The earnings reports from the big banks show “a trend of lower bad debts and provision releases which boosted earnings, a benefit from lower deposit pricing which improved net interest margins, and also a greater focus on cost reduction targets,” said Omkar Joshi, portfolio manager at Opal Capital Management.


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