Bank stocks still seen as a haven by investors

The Australian Financial Review
04-09

Major bank earnings could plunge by as much as 25 per cent if there were a recession in Australia, triggered by an uncertain global economic outlook amid a fierce trade war, according to a broker report.

Morgan Stanley said it had run scenarios where the major Australian banks’ bad debts grew during a recession – based on previous bad debt peaks in economic downturns – and predicted that earnings could fall by between 7 per cent and 25 per cent.

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