Jefferies sees higher swaps supporting Australia's bank margins amid macro woes

Westpac Banking

09/04/2026 23:11

** Jefferies focuses on margins and asset quality amid macro uncertainty, saying higher swap rates offer a near-term lift to bank net interest margins

** Says current swap levels imply a cumulative 15-basis-point net interest margin tailwind through FY29 if rates hold, led by Commonwealth Bank of Australia CBA.AX and National Australia Bank NAB.AX

** Sees limited near-term risk of a sharp spike in bad debts, citing strong corporate balance sheets and conservative provisioning assumptions

** Prefers NAB, citing stronger provisioning, greater leverage to higher rates and attractive valuation

** Maintains 'hold' ratings on ANZ ANZ.AX and Westpac WBC.AX, and an 'underperform' on CBA

** Notes major banks are prioritising returns over volume, limiting scope for aggressive price competition despite higher rates

** The broader S&P/ASX 200 financials index .AXFJ up ~8% this year, as of last close

(Reporting by Roushni Nair in Bengaluru)

((Roushni.nair@thomsonreuters.com))