The August 2025 reporting season has now passed the halfway mark, with results from the major banks taking centre stage over the last week, alongside a number of notable updates from large caps across other sectors.
Within the Financials sector, after CBA’s rally to extreme levels – driven more by flows and technicals than fundamentals – its in-line FY25 result has not been enough to sustain its momentum, given the high bar set by its elevated valuation. CBA was priced for further consensus earnings upgrades that have not materialised since its result, which in our view was the weakest update (relative to expectations) out of the Big 4. On the other hand, the strongest update came from Westpac.
We are seemingly in the early stages of a rotation out of CBA and into the rest of the Big 4 Banks, which continue to offer substantially better value despite broadly similar consensus earnings growth forecasts. In this report, we explore each of the banks’ latest updates, highlight key themes from across the sector, and reiterate our current preferences (ANZ and Westpac > CommBank and NAB).
Outside of the Financials sector, we also provide summaries of the major Focus Portfolio results from the last week – including full year results from CSL and Evolution Mining.
Looking forward, this next week is action packed with results from across the Focus Portfolio, including Santos, The Lottery Corp, and James Hardie today; Telix Pharmaceuticals, Goodman Group, Brambles, and Northern Star Resources on Thursday.
Key Themes from the Bank Sector
- Growing business banking competition – CBA called out intense competition in business banking, led by Westpac and NAB, who CBA says are ‘pricing below the cost of capital’, which saw CBA’s business banking NIM fall 1bps HoH. Westpac also called out strong growth in its business banking segment.
- Cost headwinds – OPEX rose across the board, driven largely by staff and technology costs. CBA and NAB both disappointed on this front, while WBC fared better than expected. CBA’s OPEX was higher than expected as it rose +6% YoY, driven in part by its AI spend. NAB increased its full year OPEX growth guidance from <4.5% to ~4.5% (vs consensus of 3.9%), partly due to $130m of additional costs to resolve staff underpayments, while WBC’s OPEX rose +3% QoQ (as expected) amidst its ongoing spend on Project Unite (its tech simplification initiative).
- Benign bad debts: underlying credit impairment charges have remained low, generally surprising to the downside of consensus, while arrears are stabilising as cost-of-living pressures ease.
- Resilient system growth: housing and business credit remains sound, with system growth of 5-7% expected for both in 2026 according to CBA Global Economic & Markets Research. This is broadly in line with post-GFC averages.
- Strong capital positions: all of the Big 4 Banks’ CET1 ratios remain comfortably above APRA’s ‘unquestionably strong' benchmark of 10.25%, led by Commbank and Westpac at 12.3%, followed by NAB and ANZ, at 12.1% and 11.9% respectively.
| Name | Ticker | Focus Portfolio weight | Release date | Period | ISG view | Result summary |
| CommBank | CBA | 0.0% | Wed 13 Aug | FY25 | Neutral | Sound result not enough to justify valuation premium. CBA delivered a broadly in-line FY25 result, with cash NPAT of $10.25bn (+4% YoY) marginally ahead of consensus ($10.22bn). NIM rose +9bps to 2.08% as expected, loan impairments were -9% below forecasts, and CET1 of 12.3% edged above consensus (12.2%). However, cash ROE of 13.5% missed expectations (13.7%). The key negative was costs, with OPEX +6% to $13bn (vs $12.86bn expected), pushing the cost-to-income ratio +70bps higher to 45.7% amidst increased spend on tech and AI. Overall, a sound result, but with no meaningful EPS upgrades, this result wasn’t enough to justify CBA’s significant valuation premium. |
| Westpac | WBC | 5.5% | Thu 14 Aug | 3Q25 | Positive | Positive update drives EPS upgrades. Westpac’s 3Q25 update was stronger than expected, with profits tracking well ahead of 2H25 consensus. Pre-provision profit rose +6% to $2.8bn, NPAT +14% to $1.9bn, and core NIM improved +5bps to 1.85%. Costs grew +3% (run-rating slightly below consensus), driven by Project UNITE, but pleasingly positive jaws were maintained as revenue rose +4%. Credit quality held up with impairment charges remaining low at 5bps, while CET1 lifted to 12.3%. With 3Q25 NPAT of $1.9bn, WBC only needs to deliver ~$1.4bn in the Q4 to achieve consensus. Accordingly, the quarterly update has resulted in mid single digit EPS upgrades from consensus. |
| ANZ | ANZ | 8.0% | Fri 15 Aug | 3Q25 | Neutral | Key metrics tracking positively, consensus well supported. ANZ’s 3Q25 trading update was light on detail but positive overall, with CET1 up +16bps to 11.94% (ahead of consensus), loan growth of +$16bn (tracking ahead of 2H targets), and impairment charges were just $97m (well below consensus). Non-performing loans also edged lower to 0.77%, reflecting resilient credit quality. While the update lacked full earnings disclosure, the key trends suggest FY25e consensus remains well supported. |
| NAB | NAB | 0.0% | Mon 18 Aug | 3Q25 | Neutral | Tracking slightly ahead of consensus, but costs and bad debts higher. NAB’s 3Q25 update was broadly in line, with revenue +3% to $5.3bn and underlying profit +2% to $2.8bn, both tracking slightly ahead of 2H25 consensus. Cash earnings were stable at $1.77bn, while credit impairment charges rose +46% (vs 1H quarterly average) to $243m due to tough comps which included a one-off provision release. Costs increased +3% and FY25 OPEX guidance was revised higher (from <4.5% to ~4.5%, vs consensus of 3.9%) amid increased tech investment and payroll/remediation issues. CET1 of 12.14% remained strong. Overall, the update was sound, but higher impairments and cost growth are key negatives. There has been low single digit EPS upgrades post result. |
Source: Refinitiv, Visible Alpha, Wilsons Advisory.
Bank Sector Earnings Outlook Largely Unchanged
This reporting season we have seen solid consensus upgrades for Westpac, modest upgrades for NAB, while EPS forecasts for CommBank and ANZ have remained largely unchanged.
Across the sector, medium-term EPS growth forecasts remain modest, supported by ongoing credit growth, but constrained by margin pressure from deposit competition and elevated funding costs, alongside continued cost inflation.
Accordingly, the Focus Portfolio remains underweight the sector, with our preference remaining towards Westpac and ANZ, which offer attractive relative value, trading on forward PE multiples of 18x and 14x respectively (vs CBA at 27x).
CBA’s Valuation Premium has Further to Unwind
We remain comfortable having zero exposure to CBA in the Focus Portfolio. While the bank has de-rated since late June, it continues to trade at extreme levels relative to history, domestic and global peers, and its growth outlook.
We concede that CBA is Australia’s highest quality bank, given its dominant market position, strong management track-record, sector-leading profitability (as measured by ROE), and its digital/technology leadership. Accordingly, CBA deserves a premium, however, its current valuation gap over the other Big 4 Banks remains excessive in our view.
At a forward price-to-book of 3.5x, CBA trades at a 113% premium to its major bank peers, at an average of 1.6x. This is well above its ten-year average premium of 68%. If we apply CBA’s historical premium to its forward book value – assuming mean reversion – this implies CBA should trade at $132.51 per share, which represents >20% downside to the current share price, as shown in Figure 7.
Therefore, with CBA's consensus upgrade cycle losing pace and its valuation premium remaining well above historical averages, risks remain skewed to the downside for the CBA share price in our view.
| CBA | Big 4 (ex CBA average) | CBA premium | |
| 12 month forward price-to-book (current) | 3.47 | 1.63 | 113% |
| 10 year average | 2.23 | 1.33 | 68% |
| Target price-to-book (CBA 10 yr avg premium x current peer multiple) | 2.73 | ||
| 12 mth fwd price book value per share | $48.5 | ||
| Implied value per share | $132.51 | ||
| CBA share price | $171.40 | ||
| Implied downside | -23% |
Source: Refinitiv, Wilsons Advisory.
Other Focus Portfolio Results
CSL Limited (CSL) – Disappointing result and outlook paired with restructuring plans
Focus Portfolio 8% - under review
CSL’s FY25 result was a low quality headline beat. NPATA rose +14% YoY in constant currency (cc) terms to $3.22bn, which was 2% above consensus but this was driven by lower R&D spend and tax expenses as well as a better-than-expected result from Seqirus. The core Behring segment – which is central to our thesis – was weaker than expected.
Behring grew its revenue by +6% (cc) to US$11.16bn, which was 3% below consensus, driven by disappointing immunoglobulin and specialty product sales. The segment’s adjusted gross margins improved 130bps (cc) to 51%, which was below also consensus.
CSL provided FY26 guidance for NPATA of US$3.45-3.55bn (7-10% cc growth) (excluding one-off restructuring costs). As consensus sits towards the higher end of the guidance, at US$3.47bn (+9% cc), we expect low single digit EPS downgrades to FY26e estimates.
Restructuring and Capital Management Plans
Management also announced restructuring and capital management plans, including:
- Seqirus demerger – CSL plans to create two focused global health care leaders, separating Behring, which is CSL’s growth engine, from the lower quality vaccine segment, Seqirus. Plans are for Seqirus to become a separately listed ASX entity by the end of FY26. This spin-off could help to unlock value for shareholders, with Seqirus arguably diluting CSL’s headline multiple.
- Cost out program – CSL will optimise its R&D spend to focus on ‘high growth priority growth opportunities’, reduce its headcount by 15%, and close underperforming plasma centres in order to achieve pre-tax savings of >US$500m p.a. by FY28 (with the majority by FY27). This should be EPS accretive over the medium-term, however, this could reduce longer-term pipeline upside, which arguably means CSL deserves to trade on a lower multiple going forward.
- Buyback – given its significant de-levered balance sheet, CSL unveiled a refreshed capital management strategy including a buyback worth A$750m in FY26, which is expected to progressively increase over the medium-term.
ISG view
Overall, we are disappointed in the quality of the FY25 result, with key underlying drivers (particularly Behring’s gross profit and margin recovery) being worse than expected.
While the cost-out and buyback plans should be EPS accretive over the medium-term, and we see the merits of the Seqirus spin-off, these initiatives could be viewed as an attempt to mask an otherwise weak outlook.
Evolution Mining (EVN) – best in class delivery, with further free cash flow inflection to come…
Focus Portfolio 3%
EVN’s FY25 result was broadly in line with expectations, noting key FY25 production/cost figures and FY26 guidance were both pre-released. Underlying NPAT grew +99% YoY to $958m (+4% above consensus), EPS grew +111% YoY to 46cps (+2% above consensus), and EVN announced a record final dividend of 13cps, which was 3x higher than FY24. Gearing fell to 15%, from 25% in June 2024.
For FY26, EVN has guided towards:
- Roughly flat gold/copper volumes at the group level.
- A ~20% decline in group CAPEX vs FY25.
- Moderately higher unit costs due to the processing of lower grade stockpiled ore (albeit EVN remains the lowest cost producer on an AISC basis).
This backdrop, combined with our expectations of favourable gold pricing, underpins our expectations of attractive free cash flow growth and further
de-leveraging over FY26/27.
Overall, EVN continues to offer attractive leverage to the gold price and still represents good value at a FY26 FCF yield of 7% (with room for upgrades given consensus gold price assumptions remain conservative).
Reporting Season Around the Grounds – Key Results So Far
Written by
Greg Burke, Equity Strategist
Greg is an Equity Strategist in the Investment Strategy team at Wilsons Advisory. He is the lead portfolio manager of the Wilsons Advisory Australian Equity Focus Portfolio and is responsible for the ongoing management of the Global Equity Opportunities List.
About Wilsons Advisory: Wilsons Advisory is a financial advisory firm focused on delivering strategic and investment advice for people with ambition – whether they be a private investor, corporate, fund manager or global institution. Its client-first, whole of firm approach allows Wilsons Advisory to partner with clients for the long-term and provide the wide range of financial and advisory services they may require throughout their financial future. Wilsons Advisory is staff-owned and has offices across Australia.
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