Current predictions from Morgan Stanley suggest a mid-single-digit margin decline for Australian banks in the June quarter.

It is also expected that bank expenses will be largely in line with the bank’s near-term forecasts.

However, they anticipate that financial year 2024 and 2025 expense growth forecasts may need to be adjusted upwards due to recent multi-year wage agreements and escalating IT service costs.

The firm maintains that credit quality will hold steady, but predicts that the major banks' average loss rate will experience a mild increase around 2 basis points quarter-over-quarter in the June quarter.

Morgan Stanley predicts that Commonwealth Bank (ASX:CBA) will post a satisfactory second half 2023 result and announce an additional buyback of around one billion Australian dollars, but their future commentary will be the most significant influence on the share price.

The risk of another unsatisfactory margin result has also been raised for National Australia Bank (ASX:NAB).

The second half 2023 earnings for Bendigo and Adelaide Bank (ASX:BEN) are projected to meet or exceed consensus.

However, recent deposit pricing trends suggest a degree of caution is needed when looking forward to the 2024 fiscal year.

As for year-to-date stock performance, CBA has risen 0.1%, while NAB and BEN have slid 7.1% and 6.6% respectively.

Commonwealth Bank is a leading Australian bank, National Australia Bank is one of the four largest financial institutions in Australia, and Bendigo and Adelaide Bank is a retail bank serving around 1.5 million customers across Australia.