JP Morgan analyst Andrew Triggs predicted ANZ would post the strongest pre-provision profit growth of the big four, saying it had more exposure to New Zealand and the US, where interest rates were rising faster than in Australia.

Despite the expected expansion in margins, Jefferies analyst Brian Johnson noted bank shares had also rallied sharply in the past month as investors priced in the good news. Westpac shares are up 10.8 per cent in the last month, ANZ shares are up 9.3 per cent, NAB has risen 7 per cent, and CBA has gained 6 per cent.

Johnson pointed to the potential longer-term challenges facing bank shares if the economy suffers a downturn next year, which would likely result in weaker credit growth and higher bad debt costs.

“I understand why they’ve gone up in the last month, but I think the risk is they are quite a bit lower in a year’s time,” Johnson said.

Barrenjoey analyst Jonathan Mott predicted a sharp rebound in margins, noting recent positive guidance from Bank of Queensland, and said loan quality would be “pristine”.

“This is likely to be a reporting season for the bulls, as was seen with BOQ’s NIM commentary,” Mott said.

Even so, Mott said 2023 could be more challenging for banks as rate rises started to have a more pronounced impact on the economy. Mott added banks would be sensitive to the reputational risk of posting sharply wider margins at a time when many customers were facing financial stress.

ANZ on Friday said its results would include a $113 million charge because of factors including compensation and restructuring costs.

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