Australian bank reporting season kicks off this week, with Westpac reporting today, ANZ Tuesday and National Australia Bank on Thursday. focus will be on: • Bad and doubtful debts: Westpac and NAB have exposure to law firm Slater & Gordon, NAB lent to Dick Smith, with ANZ and all three other majors exposed to Arrium. It is well known ANZ and CBA are overweight loans to miners with CBA highly exposed to the WA economy. In addition, ANZ and CBA are overweight Energy and New Zealand dairy. It is likely the banks which are perceived to have inadequately provided for these exposures will come under pressure • Dividend cuts: Analysts are anticipating ANZ to include dividend cuts as a part of their recent firm wide restructure. • Future capital raisings: all the major banks will be forced into a second round of capital raisings this year as a result of regulatory requirements. • Short positions in bank shares are currently at their highest levels since 2011. ANZ on 2.9% shorted, NAB on 1.6% and Westpac on 2.7%.