Disappointing Earnings from Major Banks and Miners: A Comprehensive 2025 Analysis

The Australian Securities Exchange (ASX) remains heavily influenced by two major sectors: financials and resources. Banks account for a substantial share of the Australian market, while mining companies remain closely linked to commodity prices, Chinese demand, global industrial activity and the Australian dollar.

The earnings picture in 2026 is more mixed than the disappointing 2025 environment described in earlier market commentary. Some major Australian banks have delivered resilient or improving earnings, while mining companies have benefited in several cases from stronger commodity prices, productivity gains and operational improvements.

For example, Commonwealth Bank reported FY2026 cash NPAT of A$10.982 billion, while BHP reported record iron ore production and shipments for FY2026. Rio Tinto also reported stronger first-half 2026 earnings, while Mineral Resources delivered its strongest financial result in its 20-year listed history.

At the same time, investors still face important challenges. Australian inflation remains above target, interest rates have tightened again, global commodity prices remain volatile and geopolitical uncertainty continues to affect business costs and financial markets.

This article examines the latest ASX banking and mining earnings, the factors driving performance and the key issues investors can monitor in 2026.

The 2026 ASX Earnings Environment

Banking and Mining Remain Central to the ASX

The performance of Australia's major banks and miners can have an outsized influence on the broader ASX because of their size and economic importance.

The major banks include:

• Commonwealth Bank (ASX: CBA)
• National Australia Bank (ASX: NAB)
• Westpac (ASX: WBC)
• ANZ Group (ASX: ANZ)

Major resource companies include:

• BHP Group (ASX: BHP)
• Rio Tinto (ASX: RIO)
• Fortescue (ASX: FMG)
• Mineral Resources (ASX: MIN)

However, 2026 earnings demonstrate that these groups should not be treated as a single category.

Some companies have benefited from higher production, improved commodity prices or stronger operating efficiency, while others continue to face competitive pressure, higher costs or changes in credit conditions.

Australian Banks: What the 2026 Results Show

Commonwealth Bank

Commonwealth Bank provides an important example of resilience in the banking sector.

Its FY2026 Annual Report shows:

• Statutory NPAT of A$10.911 billion
• Cash NPAT of A$10.982 billion
• Cash return on equity of 14.0%
• CET1 capital ratio of 12.0%

Cash NPAT increased 7% over the year. CBA also reported growth across retail lending, retail deposits, business lending, business deposits and consumer finance.

This does not mean the banking environment is without challenges. Competition remains intense, while changes in interest rates can affect lending demand, deposit pricing and net interest margins.

National Australia Bank

NAB's 2026 half-year results provide a more nuanced picture.

NAB reported:

• Statutory net profit of A$2.75 billion
• Cash earnings of A$2.639 billion
• Cash earnings excluding large notable items of A$3.588 billion
• CET1 ratio of 11.65%

Underlying profit excluding large notable items increased 6.4% compared with the previous half, while cash earnings excluding large notable items increased 2.3%. However, NAB's reported credit impairment charge increased 45.6% compared with the previous half.

NAB also noted that a change to its software capitalisation policy reduced reported cash earnings by A$949 million.

This illustrates why investors need to distinguish between statutory profit, cash earnings and underlying performance when analysing bank results.

Westpac

Westpac's 2026 interim result was also mixed.

For the six months ended March 2026, Westpac reported:

• Statutory net profit of A$3.4 billion
• Net profit excluding notable items of A$3.5 billion
• CET1 ratio of 12.4%
• Interim dividend of 77 cents per share

Statutory net profit declined 5% compared with the second half of 2025 but increased 3% compared with the first half of 2025. Westpac also said it had taken a prudent approach and increased provisions amid global uncertainty.

ANZ Group

ANZ's first-half 2026 results were stronger than the previous half.

ANZ reported:

• Statutory profit of A$3.65 billion
• Cash profit of A$3.78 billion
• Cash profit up 14% excluding significant items
• CET1 ratio of 12.39%
• Interim dividend of 83 cents per share

Operating expenses fell 9% excluding significant items, while profit before provisions increased 12% on the same basis.

The results demonstrate that the major banks are not experiencing a uniform earnings decline in 2026.

What Is Driving Bank Earnings?

Net Interest Margins

Net interest margin remains an important earnings driver for Australian banks.

The margin between what banks earn on loans and what they pay for funding can change as interest rates, deposit competition and lending competition evolve.

CBA's FY2026 results, for example, showed strong operating performance despite competitive conditions, while its FY2026 half-year result had already shown a 4-basis-point decline in net interest margin.

Credit Impairments

Credit quality is another important factor.

When household or business financial conditions deteriorate, banks may need to increase provisions for potential loan losses.

NAB's 1H26 credit impairment charge increased substantially compared with the previous half, demonstrating why investors should monitor provisions and asset-quality indicators alongside headline profit.

Operating Costs

Technology investment, regulatory requirements, wages and transformation programs can influence bank cost bases.

Banks are increasingly investing in artificial intelligence, automation and digital platforms, creating short-term expenditure but potentially changing operating efficiency over time.

Westpac, for example, has scheduled a dedicated 2026 Data, Digital and AI update as part of its investor communications.

Mining Earnings in 2026

The mining sector presents a very different earnings profile.

Revenue and profitability can change substantially because of movements in commodity prices, production volumes, operating costs and exchange rates.

BHP

BHP reported a strong FY2026 operational performance.

The company delivered record iron ore production and shipments in Western Australia and produced around 2 million tonnes of copper for the second consecutive year. BHP also reported stronger realised prices for iron ore and copper, while maintaining cost guidance despite inflation, higher diesel prices and global supply-chain pressures.

This represents a significant change from the simplistic assumption that major miners were broadly suffering from weak earnings.

Rio Tinto

Rio Tinto's first-half 2026 results also showed improved financial performance.

The company reported:

• Underlying EBITDA of US$14.8 billion, up 28%
• Free cash flow of US$3.8 billion, up 75%
• Profit after tax attributable to owners of US$6.7 billion, up 47%
• Underlying earnings of US$6.9 billion, up 43%

Rio Tinto also reported 3% growth in copper-equivalent production in the first half.

Its second-quarter operational review said Pilbara iron ore production reached its highest first-half level since 2018, while Oyu Tolgoi copper production increased by more than 30% in the first half.

Fortescue

Fortescue also delivered substantial FY2026 production.

The company reported:

• Record iron ore shipments of 201.3 million tonnes
• Underlying EBITDA of US$8.6 billion
• Underlying NPAT of US$3.5 billion
• Free cash flow of US$3.2 billion

Fortescue's FY2026 dividend totalled A$1.08 per share.

The company's results demonstrate the importance of shipment volumes and operating efficiency in determining mining earnings.

Mineral Resources

Mineral Resources provides another example of how quickly mining earnings can change.

In FY2026, MinRes reported:

• Revenue of A$6.5 billion, up 44%
• Underlying EBITDA of A$2.6 billion, up 183%
• Underlying NPAT of A$822 million, up 831%
• Net debt to underlying EBITDA of 1.7 times

The result was supported by growth in Mining Services, the ramp-up of Onslow Iron and improved lithium performance and prices.

Its FY2026 activity report also recorded record annual volumes across Mining Services, iron ore and lithium.

Why Mining Earnings Can Change Quickly

Commodity Prices

Commodity prices remain one of the largest variables affecting mining earnings.

Iron ore, copper and lithium can experience significant price changes based on:

• Chinese industrial demand
• Global infrastructure investment
• Supply additions
• Inventory levels
• Currency movements
• Global economic growth

For lithium producers, the recovery in realised prices during parts of FY2026 has been particularly relevant.

Production Volumes

Higher commodity prices do not automatically translate into higher profits.

Mining companies also need to deliver production targets.

BHP's record iron ore production, Rio Tinto's higher copper-equivalent production and Fortescue's record shipments show how operating performance can influence financial results alongside commodity prices.

Operating Costs

Fuel, labour, equipment, energy and logistics costs can significantly affect mining margins.

BHP specifically cited inflation, higher diesel prices and global supply-chain disruptions as operating headwinds during FY2026.

The Australian Economy and Interest Rates

The macroeconomic environment remains important for both banks and miners.

The Reserve Bank of Australia left the cash rate target unchanged at 4.35% in August 2026 after raising rates three times earlier in the year. The RBA said inflation remained too high and that financial conditions were somewhat restrictive.

Australia's headline inflation rate was 3.9% over the year to the June quarter 2026, while trimmed-mean inflation was 3.6%.

The RBA expects GDP growth to slow during 2026 before gradually recovering.

This matters to banks because household borrowing, mortgage demand, business lending and credit quality are linked to economic conditions.

For miners, economic growth affects commodity demand, although individual commodities can follow very different cycles.

China and Global Commodity Demand

China remains an important factor for Australia's resources sector.

The RBA expects Chinese growth to remain supported by infrastructure investment and exports, with the global AI investment cycle also contributing to demand. The RBA's August 2026 forecasts put Chinese year-average GDP growth at 4.6% for 2026 and 4.5% for 2027.

However, Australian investors should avoid treating China as a single-variable explanation for mining earnings.

Commodity-specific supply and demand conditions can be just as important.

For example:

• Iron ore depends heavily on steel production.
• Copper is influenced by electrification, infrastructure and industrial activity.
• Lithium is affected by battery and EV demand as well as mine supply.
• Gold has different drivers, including investment demand and monetary conditions.

Global Trade and Geopolitical Risks

Global trade tensions remain another source of uncertainty.

Tariff changes, shipping disruptions and geopolitical conflicts can affect:

• Commodity prices
• Freight costs
• Energy prices
• Supply chains
• Inflation
• Currency markets
• Business investment

The RBA said in August 2026 that global uncertainty remained significant, particularly around US trade policy and geopolitical developments.

For Australian companies, the effects vary.

A diversified mining company may have different exposure from a domestic bank, while a business with substantial overseas operations may experience currency benefits or costs from a changing Australian dollar.

How Investors Can Analyse ASX Earnings

Rather than focusing only on whether headline profit increased or declined, investors can examine several additional indicators.

For Banks

Key measures include:

• Net interest margin
• Cash earnings
• Statutory profit
• Credit impairment charges
• Bad-debt trends
• Loan growth
• Deposit growth
• CET1 capital
• Cost-to-income ratio
• Return on equity

Comparing several periods can provide more context than looking at a single earnings announcement.

For Mining Companies

Important measures include:

• Production volumes
• Sales volumes
• Realised commodity prices
• Unit costs
• All-in sustaining costs where relevant
• Free cash flow
• Capital expenditure
• Net debt
• Project development costs
• Commodity price sensitivity

The difference between production growth and profitable production growth is particularly important.

What Could Influence ASX Earnings Ahead?

Interest Rates

Changes in interest rates can influence borrowing, household spending, housing activity and business investment.

The RBA currently expects financial conditions to remain restrictive while inflation gradually moves back toward its target range.

Commodity Prices

Mining earnings will continue to depend heavily on commodity prices.

Investors can monitor iron ore, copper, lithium, gold and other commodities relevant to individual companies.

Productivity

Productivity improvements can help businesses offset wage, energy and other cost pressures.

For miners, automation and operational improvements can have a direct effect on unit costs.

AI and Infrastructure Investment

The RBA has identified strong AI-related investment as an important source of global and Australian economic activity.

Australian business investment in data centres has also contributed significantly to domestic investment growth.

This creates potential second-order effects for electricity infrastructure, construction, technology and resources.

Key Risks to Monitor

Banking Risks

Investors should monitor:

• Higher credit losses
• Mortgage stress
• Weak loan growth
• Margin compression
• Rising operating costs
• Regulatory changes
• Housing-market weakness

Mining Risks

For miners, major risks include:

• Falling commodity prices
• Production disruptions
• Higher fuel and labour costs
• Project delays
• Capital expenditure overruns
• Regulatory changes
• China demand weakness
• Currency movements

Macro Risks

The wider market also faces:

• Persistent inflation
• Higher-for-longer interest rates
• Geopolitical tensions
• Trade restrictions
• Energy-price shocks
• Global economic slowdown

The RBA currently expects Australian GDP growth to be subdued during 2026, while inflation is expected to decline only gradually.

Banking vs Mining: Different Earnings Drivers

Banks and miners both have major influence on the ASX, but their earnings drivers are fundamentally different.

This distinction is useful when interpreting ASX earnings announcements.

13. Long-Term Perspective on ASX Earnings

The 2026 earnings season shows why investors should avoid relying on a single broad narrative.

The original version of this article described major banks and miners as experiencing widespread earnings disappointment.

Current results show a more differentiated picture.

CBA delivered higher FY2026 cash NPAT, ANZ reported higher first-half cash profit excluding significant items, BHP delivered record iron ore production and Rio Tinto reported materially higher first-half earnings. Mineral Resources also reported its strongest financial result in its listed history.

That does not remove the risks facing Australian companies.

Banks remain exposed to interest rates, credit conditions and intense competition. Miners remain exposed to commodity prices and operating costs. Both sectors can also be affected by global economic conditions and geopolitical developments.

For investors researching the ASX, the more useful approach is therefore to examine company-specific earnings drivers alongside the broader economic cycle.

Conclusion

The Australian banking and mining sectors remain central to the ASX in 2026, but their earnings performance is not moving in a single direction.

Major banks are dealing with competition, interest-rate changes, operating expenses and credit conditions. At the same time, several major banks have delivered resilient or improving earnings.

The mining sector remains highly sensitive to commodity prices and operating performance, but FY2026 results from BHP, Rio Tinto, Fortescue and Mineral Resources show that production growth, productivity improvements and stronger commodity prices can materially change earnings outcomes.

The broader economic environment remains an important consideration. Inflation is still above the RBA's target, monetary policy is restrictive and Australian GDP growth is expected to slow during 2026.

For ASX investors, the key is to assess each company's individual earnings drivers rather than assuming that an entire sector is either outperforming or underperforming.

Monitoring margins, credit quality, commodity prices, production volumes, costs, balance sheets and cash flow can provide a more complete picture of the underlying business.

Financial Disclaimer: This article is for general information and educational purposes only and does not constitute personal financial advice. Investors should conduct their own research and consider their individual circumstances or consult a licensed financial adviser before making investment decisions.