0431 GMT - ANZ's deal to buy Suncorp's bank is marginally positive for the Australian major lender as it provides further scale, geographic and product diversification to its business, UBS analyst John Storey says in a note. Still, he views it to be EPS and ROE neutral, based on UBS calculations. Suncorp Bank adds around A$70 billion in loans to ANZ's balance sheet and addresses its underweight exposure to the country's third-largest retail banking market, Queensland, UBS says. ANZ expects the deal to close at end-July and be incorporated into ANZ's financials in FY 2024. The deal was approved last week by Australia's Federal Treasurer, UBS notes, but its completion remains subject to the commencement of legislative amendments around the Metway Merger Act by the Queensland parliament. (alice.uribe@wsj.com)

0348 GMT - The operating environment for Australian banks is set to deteriorate, with NAB itself tipping business credit growth to slow, Citi analysts Brendan Sproules and Thomas Strong say in a note. For new NAB CEO Andrew Irvine, Citi reckons there are several key priorities. These span the defense of business banking market share, growing corporate and institutional banking, and building a better deposit franchise. "Peers' advantages in these regards have not come overnight, nor have they come cheaply, pointing to NAB's costs to rise further," Citi says. It reckons there is a difficult outlook for NAB's stock, particularly as it is priced at decade highs, and has it as its least preferred Australian major bank. (alice.uribe@wsj.com)

0204 GMT - Australian credit growth remains modestly above the trough from last year and has been stable in recent months, say Morgan Stanley analysts in a note analyzing data for May. But they expect further slowing in business credit from here. Australian mortgage growth has improved over the past three months, MS says based on data for May, but it reckons another rate hike would slow momentum. Australian household deposit growth was also robust in May, MS says, adding Westpac grew household deposits above system in the three months to May, while ANZ was in line, but CBA and NAB lagged. (alice.uribe@wsj.com)

0159 GMT - Uranium miner Paladin's shares could rise substantially if it can close the planned takeover of Canada's Fission, say Shaw and Partners analysts. They raise their target on the ASX-listed stock to A$16.80 from A$16.40 and keep a buy rating. "When you consider that [uranium giant] Cameco trades at circa 11x Ebitda then it is clear that Paladin has substantial upside if this transaction completes," the analysts say in a note. They reckon the likelihood of a rival offer is low and say the main risk to the deal proceeding is getting approval from Fission shareholders. The consensus price target on Fission is C$2.15 a share versus the implied offer price of C$1.30, they say. Paladin is down 2.2% at A$12.21. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0142 GMT - The approval of ANZ's acquisition of Suncorp's bank by the Australian Federal Treasurer, with completion now due by end-July, adds around 5% to Morgan Stanley's FY EPS estimates pre-synergies, the investment bank's analysts say in a note. They reckon the approval announcement wouldn't have come as a surprise to investors, with the acquisition only resulting in a slight change to ANZ's business mix and risk profile. MS reckons that after taking into account targeted synergies of A$260 million pre-tax, the EPS upgrade would increase to around 7.5%, with every A$85 million or one-third increase in synergies adding around 1 ppt to EPS.(alice.uribe@wsj.com)

0139 GMT - IAG's stronger multiyear catastrophe cover reduces the Australian general insurer's cost of capital, say Morgan Stanley analysts in a note. But they reckon the company's valuation is "full" and managing volumes versus margins is also a concern given recent market-share losses. At the same time, MS thinks IAG needs to show progress on operational execution and lower cost ratio. "It also needs to address tail risks around Greensill claims, ASIC pricing litigation, and potential class action," says MS, which stays equal-weight on the stock. (alice.uribe@wsj.com)

0126 GMT - Inghams' share price has retraced since the discovery of avian flu in the Golden Plains and in NSW, but at this time it has had no impact on the company's business, says Bell Potter analyst Jonathan Snape in a note. Still, it serves as a reminder of the inherent agricultural risks facing free range poultry operations, he adds. Instead, BP sees the current stock weakness as a buying opportunity, noting similar bio risks in the almond industry have had limited lasting impact on Select Harvests. At the same time, BP sees feed cost indicators remaining lower than a year ago, and if 2024-25 crops develop as projected then this will likely emerge as a key earnings driver for Inghams in 2H FY 2025-1H FY 2026. BP keeps its buy call. (alice.uribe@wsj.com)

0100 GMT - Paladin Energy's guidance indicates a stronger ramp-up of the Langer Heinrich mine than previously envisaged, and a faster conversion to sales, say Macquarie analysts in a note. They expect Paladin will sign more sales contracts over time, "into the term price strength," as the company prepares to develop Fission's PLS project. The spot uranium price is continuing to grind higher, they say. The planned acquisition of Fission and its PLS project will be "the next major step" in Paladin's growth, say the analysts. Paladin is down 3.0% at A$12.10. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0029 GMT - IAG's underlying margin trends bode well for rival Australian general insurer Suncorp's own margin trends, say Goldman Sachs analysts Julian Braganza and Brian Kim in a note. IAG last week said its FY 2024 result is on track to report margin around the upper end of guidance ranges. This, GS notes, is driven by lower perils. GS says it now awaits Suncorp's reinsurance renewal, which could come this week. The investment bank expects to see some further reinvestment of margin to manage profitability and earnings upgrades, particularly in the context of affordability pressures. (alice.uribe@wsj.com)

0020 GMT - Australian fund managers had been buying into weakness in the local resources sector, but this looks to be being scaled back, say JPMorgan analysts in a note. Mining and energy have been deeply underperforming the Australian year to date, the analysts say, with average combined holdings by local managers up 114 basis points across the two sectors year to date. However, in May, this buying activity reversed, with the average holding in materials dropping 88 bps--the third-largest outflow on record. "Persistent concerns regarding the state of the Chinese economy and its troubled housing market have been the principal drivers of the selling," says JPMorgan, adding that while mining outperformed in May, the selling seems to have carried over and accelerated in June. (alice.uribe@wsj.com)

0008 GMT - Australia's major banks stepping back from commercial real estate lending is one of several factors contributing to housing supply shortage in that country, says JPMorgan analyst Andrew Triggs in a note. One of ANZ's current key ESG focus areas is housing affordability, he notes, with the lender focused on the supply side, by supporting an increase in social and affordable housing. JPM notes ANZ has made progress on its A$10 billion investment target, delivering over A$5.7 billion of funding towards affordable housing between 2018 and March-end this year. Still, JPM reckons that while ANZ talks about efforts made to boost housing supply, this is offset by banks generally having a cautious approach to CRE lending, including to residential property developers. (alice.uribe@wsj.com)

2357 GMT - If the RBA raises the cash rate again this could reduce margin headwinds and potentially provide a near-term tailwind for Australian banks, say Macquarie analysts in a note. Still, they remind that the positive impact of rate increases has diminished as bank customers shifted deposits away from rate-insensitive to rate-sensitive deposit categories. At the same time, higher rates comes the risk of a deeper credit cycle and higher bad debts. Macquarie currently forecastsaround 2-8 bps of margin reduction in FY 2025, but sees upside risk if rates remain at current levels or increase. However, it remains comfortable with its underweight view of the sector, as the odds of achieving a soft landing have arguably diminished as rate cuts are getting pushed out, it says. (alice.uribe@wsj.com)

2341 GMT - Australia's nonbank lenders may see clearer tailwinds, perhaps even in 2025, say Macquarie analysts in a note. They count some of the green shoots as being a stabilization in originations, repayment rates and lower funding spreads. Still, with the expectations of even small interest-rate cuts looking to be delayed, catalysts to drive significant growth in earnings remain uncertain for nonbanks, the investment bank reckons. "We are neutral on the non-bank lending sector without further clarity around the timing and magnitude of positive catalysts," says Macquarie. (alice.uribe@wsj.com)

2307 GMT -- Australia's S&P/ASX 200 looks set to fall at the open, as investors await the release of the RBA's policy minutes this week and brace for election results in the U.K. and France. ASX futures are down by 0.5%, tracking a weaker close on Wall Street last week. On Friday, the Dow Jones Industrial Average closed 0.1% lower, while the S&P 500 fell 0.4% and the tech-heavy Nasdaq Composite dropped 0.7%. U.S. markets have a shorter trading week ahead due to the July 4 holiday falling on Thursday. Ahead of the open, Lendlease said it will sell its U.S. military housing business for A$480 million and Lake Resources announced it is looking to sell non-core assets, while Evolution Mining named Fiona Hick as nonexecutive director starting July 1. Australia's benchmark index closed 0.1% higher on Friday. (alice.uribe@wsj.com)

(END) Dow Jones Newswires