We're a Baker Tilly network member
Learn more
Back to top
Australian banking reporting season update

Australian banking reporting season update

Three of the Australian banking majors reported their H1FY22 financial results during the month of May (CBA having already reported in February). A broad summary of these results can be seen in the table below.[1]

H1FY22 results (% changes are relative to H1FY21, (Mar’21 to Mar’22)[2]
Bank Net Interest Margins (%) Cash earnings ($b) Operating expense ($b) Return on equity, cash (%) CET 1 capital ratio[3] (%) Dividend ($)
ANZ 1.58 (-0.05) 3.11 (+4.1%) 4.79 (+6.9%) 10.0 (+0.3) 11.5 (-0.90) 0.72 (+0.02)
CBA 1.92 (-0.14) 4.75 (+22.7%) 5.59 (-0.1%) 12.3 (+1.8) 11.3 (-0.80) 1.75 (+0.25)
NAB 1.63 (-0.11) 3.48 (+4.1%) 3.96 (+2.6%) 11.3 (+0.2) 12.5 (+0.11) 0.73 (+0.13)
WBC 1.85 (-0.24) 3.10 (-12.4%) 5.14 (-1.9%) 8.7 (-1.5) 11.3 (-1.01) 0.61 (+0.03)


H1FY22 results (% changes are relative to H2FY21, (Sep’21 to Mar’22)
Bank Net Interest Margins (%) Cash earnings ($b) Operating expense ($b) Return on equity, cash (%) CET 1 capital ratio (%) Dividend ($)
ANZ 1.58 (-0.07) 3.11 (-3.0%) 4.79 (+4.9%) 10.0 (-0.2) 11.5 (-0.80) 0.72 (0.00)
CBA 1.92 (-0.17) 4.75 (-0.8%) 5.59 (-3.1%) 12.3 (-0.3) 11.3 (-1.30) 1.75 (-0.25)
NAB 1.63 (-0.06) 3.48 (+8.2%) 3.96 (+0.2%) 11.3 (+1.0) 12.5 (-0.52) 0.73 (+0.06)
WBC 1.85 (-0.14) 3.10 (+71%) 5.14 (-9.9%) 8.7 (+3.7) 11.3 (-0.99) 0.61 (+0.01)


Net Interest Margins

Net Interest Margins (NIMs) declined over the half (and indeed the year) for all majors as a result of fierce competition for loans and a continued customer switch into lower margin fixed rate loans. Notwithstanding the continued contraction in NIMs, banks should benefit from margin expansion over the next year as interest rates rise. CBA’s NIMs continue to be sector-leading.

Cash earnings

Cash earnings benefited from writebacks of large loan loss provisions recorded in the prior period (H2FY21). Westpac’s earnings, in contrast with peers, benefitted from a ramp-up in its cost-out programme (pre-provision profit growth was around 3%), with the bank being the only one of the majors to record an impairment charge (approximately 14 basis points) and also posting the worst revenue decline in the sector. Cash earnings should normalise over coming periods as banks cycle off low earnings.

Operating expenses

As noted, WBC has significantly cut-back on operating expenses and reiterated its ambitious targets to make further reductions in coming years. ANZ’s operating costs were significantly higher during the half, driven by a spike in investment spending. This has led to ANZ abandoning its previously announced expense targets. Similarly, NAB has abandoned its ambitious cost targets as it grapples with cost pressures, namely a result of inflation and increased regulatory costs.

Return on equity

CBA’s Return on Equity (RoE) continues to lead that of peers.

Capital ratios

All banks have adequate CET1 capital ratios, above the Australian Prudential Regulation Authority (APRA)[4] benchmark.


All banks increased their dividends when compared to H1FY21, as banks continue to cycle off low earnings.


In general, the banks reported solid results for the first half of FY22. NAB’s result was particularly strong, as earnings were not predominantly a product of cost-cutting, as was the case with Westpac’s. CBA posted a strong result in February, once again justifying the reason why it commands a share price premium relative to the other three. The question remains, given CBA’s Price to Earnings (P/E) ratio of 18, compared to Westpac’s of 16 and the two other majors (approximately 12), as to whether its share price premium is justified. Although it can be argued that CBA has the strongest brand, better economies of scale, more advanced IT systems and investments in high growth companies like Klarna, we would argue that the premium is still excessive. Nevertheless, the immediate outlook for bank earnings remains buoyed by higher net interest margins, although these tailwinds could well be challenged should interest rates move much higher where the prospect of rising loan defaults by overstretched borrowers are likely.

[1] CBA’s fiscal year ends in June, therefore FY21 is the fiscal year ending June’21, H1FY22 is the fiscal half year ending Dec’21.
[2] ASX, Home [online], https://www2.asx.com.au/, (accessed 9 June 2022).
[3] The CET1 capital ratio is the Common Equity Tier 1 capital ratio.
[4] APRA is an independent statutory authority that supervises institutions across banking, insurance and superannuation and promotes financial system stability in Australia.
Any advice included in this newsletter has been prepared without taking into account your objectives, financial situations or needs. Before acting on the advice you should consider whether it’s appropriate to you, in light of your objectives, financial situation or needs. You should also obtain a copy of and consider the Product Disclosure Statement for any financial product mentioned before making any decisions. Past performance is not a reliable indicator of future performance. Advisors at Pitcher Partner Sydney Wealth Management are authorised representatives of Pitcher Partners Sydney Wealth Management Pty Ltd, ABN 85 135 817 766, AFSL number 336950.
This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

Pitcher Partners insights

Get the latest Pitcher Partners updates direct to your inbox

Thank you for you interest

How can we help you?

Business or personal advice
General information
Career information
Media enquiries
Contact expert
Become a member
Specialist query
Please provide as much detail to ensure appropriate allocation of your query
Please highlight a realistic time frame that will enable us to provide advice within a suitable and timely manner. Please note given conflicting demands with our senior personnel, we will endeavour to respond to you within the nominated time frame. If you require an urgent response, please contact us on 03 8610 5477.
CPN Enquiry
Business Radar 2024
Federal Budget 2024-25
Student careers 2024-25
Search by industry