The big four banks have reported strong profits this season on the back of interest rate hikes. However, mounting pressures on net interest margins and increased competition are squeezing bank profits, signaling an end to the good times for Australian banks.

In this Reporting Season Bank Special, our Head of Australian Equities, Brad Potter, discusses the major headwinds affecting the sector and his outlook for the coming six months.

Last week saw Coles report a result that met expectations, but the supermarket retailer's outlook commentary was met with a tepid market response reflecting a challenging operating environment. 

By contrast, Insignia Financial and Iluka Resources announced results that caught investors by surprise (positively!), with both companies well-placed moving into FY24.

With the end to the August reporting period fast approaching, inflation, labour shortages, weakness in China and the Ukraine war continue to weigh heavily. So where to now for Australian markets?

Brad Potter, Tyndall AM’s Head of Australian Equities, gives his take in the final episode of the August 2022 4-Minute Monday podcast.

The third week of the August rush saw a wave of earnings updates from Australian corporates. 

BHP was a genuine standout, with outstanding cash flow performance helping to support a pristine balance sheet despite still finding room for a stellar dividend which represented an 8.6% yield for the half and almost 16% for the full year (including franking). 

Separately, Santos announced a tripling of profits and a near doubling of free cash flow, while Downer delivered a result largely in line with expectations. So why was the market's response so tepid to both results? 

Brad Potter, Tyndall AM’s Head of Australian Equities, gives his take on these companies and more in the penultimate episode of the August 2022 4-Minute Monday podcast.

Week two of the August reporting period saw QBE deliver a strong first half result that suggests upside in both valuation and earnings, with strong top line momentum and above-inflation premium rises a feature.

The big banks in CBA and NAB didn't quite deliver, however, with cost pressures a thematic that are likely to play out over the next 1-2 years across the sector. Net Interest Margins, though, are set to expand in the coming quarter as Australia's banks take full advantage of RBA rate hikes. 

But the biggest news this week may well have come from a company which is yet to report, with BHP's stunning $8.3bn takeover offer for Oz Minerals' rejected outright. Is there merit in a combination? Is a higher offer in the works? 

Brad Potter, Tyndall AM’s Head of Australian Equities, discusses this and more in episode two of the August 2022 4-Minute Monday podcast.

This coming reporting period follows an extraordinary period of monetary tightening across the globe, with many corporates continuing to grapple with huge spikes in wage and input cost inflation. 

Despite some recent easing in supply chain stresses brought about by the Russia-Ukraine conflict, concerns of recession in the major economies continue to build.  

Against such a challenging backdrop, what can we expect to learn in the coming weeks from the listed market? Are resets to earnings expectations likely to feature? Will dividends and capital management be shuttered? 

Brad Potter, Tyndall AM’s Head of Australian Equities, details his views in episode one of the August 2022 4-Minute Monday podcast.

Who were the winners of the February 2022 Reporting Season?

Last week saw Rio Tinto announce a record result, confirming the second biggest profit in Australian corporate history and declaring the nation’s biggest ever dividend on the back of strong commodity prices. So what can we expect from the company in 2022? 

Geopolitics is sadly at the front and centre, with a human tragedy unfolding in Ukraine following invasion by Russian forces. As substantial providers of oil and gas to the world, and with fears of the war escalating, will we continue to see a risk-off event globally?

With the February reporting season now at an end, what were the highlights, lowlights and key themes for the month?

Brad Potter, Tyndall AM’s Head of Australian Equities, details his views in episode four of the February 2022 4-Minute Monday podcast.

Woodside outperformed the market this week, with standout cashflows, and earnings and the dividend ahead of expectations. 

For other companies, however, inflationary pressures and labour shortages are finding their way into prices and bringing a potential headwind for future profitability. But how much of this is a transitory impact of COVID?

M&A, meanwhile, continues at pace, with Crown agreeing to a takeover offer this week, and private equity and pension funds continuing to compete for hard, long duration assets. 

Brad Potter, Tyndall AM’s Head of Australian Equities, details his views in episode three of the February 2022 4-Minute Monday podcast. 

Suncorp and IAG delivered results this week that were ahead of market expectations, underpinned by strong written premium and volume growth despite La Nina and elevated natural hazard claims more generally. Meanwhile, results from Australia’s big banks raised as many questions as they answered. What do rising interest rates mean for Australia’s big 4 banks, and where is growth most apparent?

Brad Potter, Tyndall AM's Head of Australian Equities, details his views in episode two of the February 2022 4-Minute Monday podcast.

This profit season comes off the back of a global market sell-off as central banks begin to tighten monetary policy. With rising borrowing costs as companies deal with pandemic challenges, and supply chain disruptions, what's the knock-on effect on companies reporting this season?

Brad Potter, Tyndall's Head of Australian Equities discusses his views in episode one of February 2022’s 4-Minute Monday podcast.

Two themes dominated the month; the impact on Australian miners due to the fall in the iron ore price; and the emergence of the COVID reopening trade. What’s the outlook for the mining sector? And what stocks are set to outperform as the economy starts to reopen? 

Brad Potter shares his view in the final episode of 4-Minute Monday for the August 2021 reporting season.