Margin Drivers Monthly (May-26) Funding cost drivers mixed; advertised home loan spreads stable

Research evidence excerpt

Margin Drivers Monthly (May-26) Funding cost drivers mixed; advertised home loan spreads stable

J P M O R G A N Asia Pacific Equity Research

09 June 2026

Margin Drivers Monthly (May-26)

Funding cost drivers mixed; advertised home loan

spreads stable

In May, funding costs were mixed and advertised mortgage spreads stable. Term Australian Banks

ACdeposit spreads were steady at the front end but deteriorated at the long end as the Andrew Triggs

major banks increased their best long-term rates despite a decline in swap rates. (61-2) 9003-8919

Online saver base rates were mixed as not all banks passed through the full rate andrew.triggs@jpmorgan.com

hike. However, all majors reflected the cash rate increase for online saver bonus Kelsey Bentley

rates. All of the major banks saw an improvement in spreads on reward saver base (61-2) 9003 7482

rates, while reward rate spreads deteriorated modestly. On wholesale funding kelsey.bentley@jpmorgan.com

J.P. Morgan Securities Australia Limited

costs, 3/5yr swap rates declined materially. Average CDS spreads narrowed

slightly and BBSW-OIS increased. Wholesale term issuance was very strong in

May despite blackout periods around reporting season at the beginning of the

month. Mortgage competition remains persistent, with the major banks passing

through the 25bp cash rate hike to variable OO and investor rates, leaving JPM forecast U/L NIM movements (ex

Markets/Liquidity)advertised mortgage spreads unchanged.

0.06%

• Deposit spreads. In May, major banks saw an improvement in short-term TD 0.04%

spreads (-5bps), broadly stable medium-term spreads (+1bp) and a 0.02%

0.00%

deterioration in long-term TD spreads (+20bps). This reflected stable front-end -0.02%

pricing, while majors increased best long-term TD rates despite swap rate -0.04%