0102 GMT - Australian banks would be worth about a third less than currently if higher interest rates and resurgent inflation hit consumers and businesses hard, Morgan Stanley analysts say. Their bear case includes loan growth slowing to low single digits, margins declining by a percentage in the mid single digits, and loss rates rising to 15-20 basis points of loans. This gloomy scenario would result in FY 2027 earnings downgrades of up to 17% relative to Morgan Stanley's base case. Valuation multiples would be cut and MS target prices for Australia's four largest banks would be an average 32% below current share prices. (stuart.condie@wsj.com)

(END) Dow Jones Newswires

March 17, 2026 21:02 ET (01:02 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.