Fresh from ANZ comes the Mums and Dads nightmare:
This is an awful result. Cash earnings came in at $2.8bn versus $3.6bn expected, EPS was 96c versus $1.20 expected, while ROE was 9.7% versus 14.7% one year ago.
Those optimists that believe in the Australian rebalancing story, might look to pick up some discounted bank shares today given newish CEO Shayne Elliott is no doubt front-end loading his bad news. But, beware that these losses are only large “one name” borrowers, many in Asia, and if MB is right then a much bigger hit is coming in commercial and residential lending at home as well, as Australia’s post mining boom adjustment grinds on and gets worse as:
- the capex triptych of cars, mining and property begin to merge in H2;
- the Mining GFC returns as China slows through H2, and
- Australia’s AAA rating is stripped soon enough.
On a top down view, better entry points are ahead.