Don't bank on it
Market volatility and rising geopolitical risks have made the upcoming earnings season for major banks much more unpredictable.
The major bank earnings season kicks off Friday, with Macquarie Group revealing its half-yearly numbers. In these febrile times, bank profit season will be engrossing not for what the last 12 or 6 months showed but what this last 30 days has changed.
There should be no major shocks given how closely these stocks are followed and how messy stuff is pre-announced, as with Westpac last week. But these are September 30 balance dates. That was a month ago. Before the escalation of conflict in Israel and Gaza. Before the latest turmoil on global bond markets.
The core numbers themselves are done and dusted — revenue, profits, margins, cost to income, return on equity. But not everything is locked in. And this is where the uncertainty lies.
The world has become more uncertain and unpredictable in October, so will bank management teams take a different attitude to risk and capital? Will they lift general provisions for greater turmoil ahead? What cost targets have been built in?
