Morningstar cuts FY27 profit forecasts for Australian banks, expecting slower credit growth
BUZZ-Morningstar cuts FY27 profit forecasts for Australian banks, expecting slower credit growth ** Morningstar lowers FY27 profit forecasts for Australian banks, trimming forecasts for new lending further, deeming them expensive despite recent share price correction
** Major bank stocks have declined steeply since March — Commonwealth Bank of Australia CBA.AX slipped over 6%, Westpac WBC.AX declined more than 15%, NAB NAB.AX slumped over 20% and ANZ ANZ.AX fell ~11%
** The sell-off came as banks increased provisions amid U.S-Iran war-related cost pressures; it deepened as rising rates and proposed tax changes weighed on the consumer and housing outlook - Morningstar
** It further cut its new-lending growth forecast to 2.5% from 7% in the 12 months to April 2026, citing lower credit demand for existing dwellings
** The investment research firm trims FY27 and medium-term profit forecasts by ~5%, expecting competition to fuel discounting
** Also cuts fair value estimates for ANZ, NAB and WBC by 3% to A$32, A$33 and A$30, respectively; keeps CBA unchanged, citing lower cost of equity
(Reporting by Shruti Agarwal in Bengaluru)
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