What happened
Westpac reported in its third-quarter update that average monthly mortgage application volumes fell 11% quarter-on-quarter and were down 20% compared to the post-budget run rate. The announcement triggered a 4.6% drop in Westpac shares and dragged the broader S&P/ASX 200 Financials Index down 2.4%.
Why it matters here
Bank profitability heavily relies on mortgage growth and net interest margins. As higher interest rates and softer housing activity curb credit demand, major banks face headwinds to top-line revenue growth, forcing investors to re-examine earnings valuations across the major Australian banking stocks.
What to watch
Full quarterly trading updates, net interest margin commentary, and credit loss provisions from rival major banks during the remainder of the August corporate reporting season.
Source
marketindex.com.au