http://www.smh.com.au/business/goldman-sachs-turns-bearish-on-local-banks-20110525-1f3wh.html
May 25, 2011 Goldman Sachs has downgraded its investment view on Australia’s banking sector. The broker is telling clients to expect increased profit-taking, given global uncertainties and a weaker domestic outlook and housing market. It has also downgraded its ratings for Commonwealth Bank and ANZ from "buy" to "hold", reflecting its more cautious view of the loan growth outlook for those lenders. Annual earnings estimates for CBA and ANZ were cut by 0.2 per cent for fiscal 2010/11, while the estimate for National Australia Bank was reduced by 0.4 per cent. Westpac’s full-year earnings estimate was unchanged. Continued risk aversion in the markets, along with tighter financial conditions, a contractionary fiscal policy and slower global growth delaying investment decisions, would act as a brake on loan growth, Goldman said. The latter has ‘‘driven a reduction in the business credit growth turnaround story for the second half of fiscal 2010-11’’, Goldman banking analyst Ben Koo wrote in a client note. The broker’s loan growth forecasts for Australian housing were reduced to 2.9 per cent for the second half of 2011. That’s equivalent to 6 per cent on an annualised basis, down from 7.4 per cent during the first half.Loan growth forecasts for business lending were also cut to 2.9 per cent for the same period. Mr Koo noted recent declines in housing lending growth and fragile consumer sentiment as other drivers of the downgrade, but said there had been no change to its expectations for bank margins or bad and doubtful debts. '+'
