ANZ, CBA, Westpac, NAB: Major bank quarterlies and the dreaded CEO conference call

The major banks are taking different approaches to their quarterly updates, but scheduled CEO conference calls are mostly seen as a bad omen.

CBA and NAB continue to be the favoured twins of the big four. Picture: AAP/ Joel Carrett.

The great unwritten rule of big-four bank quarterly updates is that CEOs doling out more information generally spells trouble, unless a global pandemic rewrites the entire rule book.

Confirmation from troubled Westpac that it would adopt the full bells and whistles approach to its update on Thursday, including a conference call with chief executive Peter King and chief financial officer Michael Rowland, immediately ignited speculation that something was amiss.

Citi analyst Brendan Sproules warned on Wednesday of a “relatively bleak” update, with core profit to shrink by 9 per cent compared to the average of the last two quarters in the 2021 financial year.

Over the last three months, the stock has underperformed its rivals by 7 per cent, as pressure intensifies on management to deliver its $8bn-a-year cost target and revitalise its key home and business-lending franchises.

A year ago, in the middle of the pandemic, Mr King and Mr Rowland hosted a conference call, as well.

Given the recent emergence of the omicron variant and the current pressure on the franchise, it’s no great surprise that they have chosen to do it again, and in all likelihood unveil an unaudited quarterly profit figure.

On Monday, the focus switches to ANZ, which is wrestling with well-documented challenges with mortgage growth, even if its interest margin has held up well as a result.

While the Melbourne-based lender is still tossing around options, it is unlikely at this stage to throw CEO Shayne Elliott to the wolves and schedule a conference call.

Read into that what you will, but maybe the bank can see an exit path from its long-running mortgage drama.

ANZ is not expected to announce a cash profit but will take the opportunity with the release of its Pillar 3 risk document to update the market on some key aspects of its business.

Finally, on February 10, there’s National Australia Bank, which for a long time has been considered “issues-rich” but is now on the way to redemption.

Even for a bank which aspires to be boring and predictable, CEO Ross McEwan is going to extreme lengths, using the same format for its quarterly trading update as last year.

A cash profit announcement is expected in an ASX statement, but without an accompanying conference call.

Commonwealth Bank, meanwhile, dares to be different, persisting with its June 30 financial year — which means a half-year profit announcement sandwiched between its rivals on February 9.

As the banks prepare to release their updates, credit growth continues to be quite robust, with this week’s lending data for December translating to the strongest year of credit expansion since 2007, on Macquarie numbers.

Housing and business credit grew by 7 per cent and 8 per cent, respectively.

Margins, however, are a different story, crunched by the switch from variable-rate home loans into lower-margin fixed-rate products.

CBA and NAB continue to be the favoured twins of the big four, with the challenges faced by Westpac and ANZ forcing them to the rear.

In December, NAB grew its home loan portfolio by 2.2 times the wider banking system, with the business banking book growing 1.6 times.

The comparative figures for CBA were 1.1 and 0.5.

ANZ home lending was flat while its business bank grew in line with the system, as Westpac’s mortgage book expanded at 0.4 times and its business banking portfolio was flat.

While the figures for a single month fail to illuminate long-term trends, the performance ladder over a 12-month period is pretty much the same – NAB and CBA are the standouts and Westpac and ANZ are the laggards.

Each bank will put the best possible gloss on their respective results, but their relative standing is unlikely to change.