FINANCIALS: CBAAU: Solid Results, Few Fears For NAB, Westpac Yet To Report

Commonwealth Bank of Australia (CBAAU: Aa2/AA-/AA-) issued 2H24 (FY24) results last night. Results were very marginally ahead of consensus, credit stats are good, albeit with some normalisation but this remains a very low risk business. Spreads (only two EUR bonds) are 2bp wider YTD (on the single EUR line issued then), presumably on Chinese slowdown/commodity fears, but both have tracked €IG banks relatively closely for the last month. These results are relatively credit neutral, therefore.

• Credit stats: loan losses are stable h/h at just 9bp of lending, 8% better than consensus. Non-performers have stepped up to significantly h/h but are still at relatively low historical levels (41bp from 35bp at Dec-23), largely driven by the home lending book. CET1 is 12.3%, 10bp ahead of expectations. So, good credit stats, albeit with some sense of normalisation in the lending book.
• Revenues were very marginally ahead of expectations, trading income missed but that’s rarely penalised by the market. Costs are broadly in line which, with loan losses beating, means pre-tax for 2H24 was 1% ahead.
• Outlook is sparse here but the macro view on its home market does appear very slightly more positive than that published six months ago. 

NAB reports Fri 16th and Westpac Mon 19th and these results gives us little cause for concern around those figures.