Major bank equities have derated significantly over the last few weeks with a selloff in response to interim earnings results and the Federal Budget’s new major bank liabilities levy. In this report we present the main themes from the bank reporting season and explain what the new budget levy means for investors. Earnings growth will stay subdued and dividends will be flat. We think the worst of the derating is over and portfolios should still have a small exposure to banks on value grounds. (VIEW LINK)