Banks - Australia: Revenue & bad debts dominate discussion

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Banks - Australia: Revenue & bad debts dominate discussion

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Banks - Australia

Revenue & bad debts dominate discussion

Industry Overview

Key takeaways 28 June 2026

Equity• AU banks underperform. Revenue slowdown risk; credit quality fears overblown

Australia

• Business bank revenues to outperform Retail as mortgage revenue pressures emerge Banks-Multinational/Universal

• More positive on ANZ (Buy) & NAB (Neutral) than WBC (Underperform) & CBA

Matt Dunger >>

(Underperform). Research Analyst

Merrill Lynch (Australia)

+61 2 9226 5329

Downward pressure on top-line, bad debt concerns matthew.dunger@bofa.com

Aida Pita >>

Australian bank underperformance against the market in 2026 (-4.5% total return vs Research Analyst

+0.6% for the ASX200) almost doubled this month on concerns for slowing revenue Merrill Lynch (Australia) +61 2 9226-5066

growth and credit quality fears. Judo Bank (not covered) closed the week 38% lower aida.pita@bofa.com

sparked by a sharp decline in credit quality; we view the downgrade as idiosyncratic.

Mortgages applications slowing, refinancing rises

We expect mortgage revenue growth will come under increasing pressure. The Federal Glossary

budget has softened demand and brokers are churning the back book. Our consultation

suggests WBC’s experience reflects the industry; mortgage applications have slowed ANZ: ANZ Banking Group

c.20% for investor properties and are flat for owner occupiers (see WBC note). Mortgage

brokers suggest refinancing borrowers get 10-30bp cheaper rates. CBA: Commonwealth Bank

Concerns for a deep credit cycle appear overblown MQG: Macquarie Group

Judo cited “customer-specific developments” on three exposures driving the FY26 bad NAB: National Australia Bank

debt charge >80bp of loans.