Bank Stocks’ Haven Tag Put to Test in Australia Earnings Season

Australia’s banking shares, a relative haven for investors dealing with tariff-induced volatility, face a fresh test as lenders unveil earnings starting next week.

The sector has benefited from the perception of its defensiveness within a relatively resilient market, according to analysts. A sub-gauge of the country’s banking stocks is up 2% this year, outperforming the benchmark S&P/ASX 200 Index amid international trade concerns.

For further gains, lenders need to deliver “stable margins, single-digit loss rates and better capital ratios in the May reporting season,” Morgan Stanley analysts led by Richard E Wiles wrote in a note.

Even so, market ...