Bank profits and stability good for community - ABA
(7 November 2012 – Australia) Australia’s big four banks have reaped a collective annual profit of A$22.8 billion, the same as winning the Melbourne Cup more than 6,300 times over, but still lower than the combined record A$24 billion of last year.
The 7 percent fall in profits, were mainly due to banks facing funding cost pressures and strong competition in the marketplace. Net interest margins were also squeezed, down by an estimated seven basis points.
Australian Bankers’ Association (ABA) chief executive, Steven Münchenberg said despite the economic uncertainty continuing to undermine the global economy, the country’s banks continued to deliver profits, performing well despite a year-on-year (collective) fall.
"It is important that banks remain stable, dependable and profitable so they can keep our money safe and continue to support growth in our economy. Banks underpin economic growth by providing finance to businesses, keeping people employed, protecting savings and supporting the financial decisions of Australians," he said.
Münchenberg said: "While some stability has recently returned to wholesale funding markets, banks continue to pay high prices for retail deposits and longer term funding as they seek to improve their funding mix. This is being driven by both the market and regulatory pressures. The competitive interest rates for savers are good news but they have been impacting on banks’ costs of funds and therefore pricing of loans."
The ABA also pointed out that over the past year, banks have paid out a record A$19 billion in dividends – 7 percent more than last year.
The majority of dividends are paid to ‘mum and dad’ shareholders, to working Australians who are saving for retirement through superannuation accounts and to retirees who are increasingly dependent upon positive business profit growth. In the past five years, banks have paid out A$82.5 billion in dividends.
The Federal Government has also benefited from the stable banking sector. Tax paid increased by 24 percent or A$2 billion to a record A$10.9 billion.
Despite assertions by some commentators, Australian taxpayers have not spent one cent on banks throughout the GFC. In fact, banks have paid the Federal Government A$3.8 billion for the use of the wholesale funding guarantees and will pay around A$5 billion by the end of the scheme.
Australian Bankers’ Association (ABA) chief executive, Steven Münchenberg said despite the economic uncertainty continuing to undermine the global economy, the country’s banks continued to deliver profits, performing well despite a year-on-year (collective) fall.
"It is important that banks remain stable, dependable and profitable so they can keep our money safe and continue to support growth in our economy. Banks underpin economic growth by providing finance to businesses, keeping people employed, protecting savings and supporting the financial decisions of Australians," he said.
Münchenberg said: "While some stability has recently returned to wholesale funding markets, banks continue to pay high prices for retail deposits and longer term funding as they seek to improve their funding mix. This is being driven by both the market and regulatory pressures. The competitive interest rates for savers are good news but they have been impacting on banks’ costs of funds and therefore pricing of loans."
The ABA also pointed out that over the past year, banks have paid out a record A$19 billion in dividends – 7 percent more than last year.
The majority of dividends are paid to ‘mum and dad’ shareholders, to working Australians who are saving for retirement through superannuation accounts and to retirees who are increasingly dependent upon positive business profit growth. In the past five years, banks have paid out A$82.5 billion in dividends.
The Federal Government has also benefited from the stable banking sector. Tax paid increased by 24 percent or A$2 billion to a record A$10.9 billion.
Despite assertions by some commentators, Australian taxpayers have not spent one cent on banks throughout the GFC. In fact, banks have paid the Federal Government A$3.8 billion for the use of the wholesale funding guarantees and will pay around A$5 billion by the end of the scheme.
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