Citi, Morningstar upbeat on top Aussie banks, but flag near term rate woes
Brokerage Citi upgrades earnings forecast for Australia's 'big four' banks by 1% in FY25 and 1-3% in FY26 to reflect better net interest margins
Citi gives a 'neutral' rating to ANZ ANZ.AX and 'sell' rating to Westpac WBC.AX, Commonwealth Bank of Australia CBA.AX and National Australia Bank NAB.AX
Says the Reserve Bank Of Australia unexpectedly holding interest rates is a positive development for the major banks
However, Citi flags downside risk into FY26 due to lower cash rates when they will be felt more meaningfully
Morningstar sees margins softening in the short term as cash rates fall, but anticipates an improvement in the medium term
Investment research firm forecasts 5% net interest income growth per year to FY2029 on higher NIMs and low-single-digit loan growth
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