Restoring industry returns 3
Estimating a normalised ROA 8
Revenue lever 8
Expense lever 12
Impairment lever 13
Normalised sector ROA 15
Estimating normalised leverage 17
Basel II – changed the game for leverage 17
Beyond the downturn, where will capital levels settle? 19
Estimating normalised leverage levels 20
Implied ROEs 26
Corporate activity scenarios 28
Valuation 31
Appendix – DuPont analysis 35
Australia and New Zealand Banking Group Ltd 48
Bank Of Queensland Ltd 48
Bendigo and Adelaide Bank Ltd 49
Commonwealth Bank of Australia 50
National Australia Bank Ltd 51
Westpac Banking Corp 52
Appendix A-1 55