This Wednesday, September 30 will see not only the end of the third quarter (which has been a bloodbath for investors), but three of the four most important companies on the ASX will also rule off their financial years.
The National Australia Bank (NAB), Westpac (WBC) and the ANZ all end their 2014-15 financial years – the Commonwealth Bank’s financial year ended on June 30 and the bank reported its record cash profit in August of $9.14 billion, and the $5.1 billion rights issue which was rejected by retail investors.
The NAB will be first of the three to announce its full year results on October 28, the ANZ follows a day later and Westpac reports on Monday, November 2.
Other banks with September 30 balance dates are Bank of Qld (BOQ) (which reports next week on October 8) and Macquarie Group (MQG), which is due to report its interim results on October 30.
There are few early estimates of how the NAB, ANZ and Westpac went over the full year – most suggest a small rise in profit over the year, but the stockmarket performance this year is telling us the bloom has gone off the most important group of stocks on the ASX, especially since the peaks in April and May.
The trend in fact has been downwards since then as more and more analysts have predicted the end of the property booms in Sydney and Melbourne and as regulators have cracked down on investor lending.
ANZ shares have been the worst performer in the past six months and in the year to last Friday.
The Commonwealth Bank’s shares fell 5.8% last week, Westpac’s shares were down 5.7%, NAB shares lost 4% and the ANZ’s shares dropped 4.9%, a relatively better performance.
But in the past six months, ANZ shares are down 26.6%, CBA shares are down 23.8%, Westpac shares have dropped 23.6% and NAB shares are off 22.8% (it is being touted as a better placed’ recovery’ story by some brokers).
In the year to last Friday, the roll call sees ANZ shares down almost 13%, NAB shares down 7.6%, Westpac shares off 6% and CBA shares have lost 4.5%. Much of those falls came from the slide last week.
Looking at the half year performances of the three, the NAB saw a 5.4% rise in its cash profit to $3.32 billion. The NAB also raised $5.5 billion (the largest ever raising in Australia) to help bolster its capital base, and to aid in the sale of its underperforming UK banking operations.
The shares were issued at $28.50, so the NAB’s share price closed at $29.79. NAB’s interim dividend was unchanged on 99 cents.
Westpac’s interim cash profit was flat at $3.8 billion, with the interim dividend raised one cent to 93 cents a share.
The ANZ earned a 5% higher cash profit of $3.5 billion and the interim dividend of 86 cents a share was raised 4%.
Things that analysts and investors will be watching for from the results are the level of impairments and set asides for non performing or dud loans.
The record low level of interest rates has eased pressure on the banks in this area, but with some analysts in the banks’ economics departments gloomy about the outlook (such as the ANZ warning of a possibility of a recession in the near future), it will be interesting to see the levels of impairments set in the reports.
Given the sell off this year, could it be the big bank shares are poised for a run up towards their reports?
And there other companies ruling off full or half years on September 30 – CSR, Orica and James Hardie.
