Big banks profits in a class of their own: RBA

The big four banks after tax profits were slightly down on previous years in 2012, but still tower over the profits earned by regional banks and foreign-owned banks.

The following graphs prepared by the RBA as part of its latest chart pack series shows the difference in profits earned by the three banking groups.

The major banks (Commonwealth Bank, ANZ, Westpac and NAB plus their subsidiaries), which have 92% of the home loan market, delivered interim after tax profits close to $12 billion in both halves of 2012, with analysts forecasting interim profits in excess of $12 billion in 2013.

In comparison, the regional banks (Suncorp, Bendigo & Adelaide Bank, Bank of Queensland) made a loss in the first half of 2012 on the back of the Bank of Queensland becoming the first Australian bank in 20 years to report a full-year loss when it reported a $17.1 million loss for the year to August 31 2012.

The outlook for profitability for the regional banks is better for 2013 with analysts forecasting cumulative profits of around $400 million in both halves of the year.

While data on the profitability on foreign-owned banks is less up-to-date, their profitability also dwarfs that of the big four banks.

This week former RBA governor Bernie Fraser said the major banks could and should cut their variable mortgage rates amid 'very, very healthy'' profits.

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Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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