Jefferies says slowdown in money supply can pressure Australian banks' net interest margins

Westpac Banking

30/09/2026 22:01

** Analysts at Jefferies warn that a slowdown in total credit growth and expensive borrowing costs can hit the net interest margins (NIM) of commercial banks
** M3 money supply or broad money growth that reflects the overall supply of money in the economy, slowed in August to 0.1% MoM, vs. 0.3% growth last month
** Jefferies says the slowdown in M3 growth indicates that funding pressures for banks are persistent, amplified by a 15-year high cash rate of 4.6% 
** Brokerage firm estimates a lower annual NIM for 3 of the "Big Four" Australian banks, except National Australia Bank NAB.AX, whose FY26 NIM is expected 0.06% higher at 1.8%
** Westpac Banking's WBC.AX FY26 NIM estimated at 1.88%, Commonwealth Bank of Australia CBA.AX at 2.05%,
and ANZ Group ANZ.AX at 1.53%; down 0.06%, 0.03% and 0.02%, respectively, on a YoY basis  
** Jefferies expects annual net interest margins to drop further till the end of 2028 

 

 (Reporting by Rudrannsh Mehra in Bengaluru)
 ((Rudrannsh.Mehra@thomsonreuters.com))