Three of Australia's biggest banks are tipped to churn out profit growth of up to 10 per cent alongside higher dividends when they report their annual earnings over the next two weeks, despite the weakening trend engulfing much of the economy.
As investors push bank share prices to record highs, ANZ Bank will kick off the earnings season on Tuesday for the nation's major lenders, with analysts expecting a $6.4 billion full-year cash profit.
All up, financial analysts forecast the majors will reap a collective profit of $27 billion this year, with NAB releasing its results on Friday and Westpac reporting next week.
The Commonwealth Bank, which reports on a year to June calendar rather than a year to September, set the scene for the strong growth in August, when it revealed a record profit for an Australian bank of $7.8 billion.
The high returns come despite other industries feeling the strain of a weakening economy and credit growth that is only a touch above the slowest pace on record.
However, the big four's earnings are expected to remain resilient because of a combination of moderate revenue growth, cost cutting and lower bad debts.
Morningstar's head of banking research David Ellis forecast ANZ's earnings would rise 10 per cent to $6.4 billion and it would pay a final dividend of 85¢ a share, taking total distributions for the year 9 per cent higher.
ANZ has been especially aggressive on cost-cutting, and Mr Ellis said lower expenses were likely to boost earnings across the sector.
"There's a massive focus on operating expenses," he said. "We will see that revenue is growing at a higher rate than expenses."
Lenders have also been insulated from the softer environment by record low interest rates, which have meant there are fewer households and businesses defaulting on their loans.
In particular, NAB's troubled British business is forecast to benefit from an improvement in credit quality, amid a nascent recovery in the country's property market.
Macquarie analyst Mike Wiblin said bank profits were likely to be enhanced by lower impairment charges as the economy continued to benefit from lower rates.
"I think NAB and ANZ are going to see lower impairments," he said.
Mr Ellis said he expected NAB to report annual profit of about $6 billion, also a 10 per cent annual rise. Westpac is forecast to report earnings of about $7.1 billion.