Australian banks endure stress test
(5 November 2009 – Australia) The Australian Bankers’ Association has commented that Australian banks have preformed extremely well against the economic backdrop.
With the reporting season for Australian banks closed, the ABA has analysed the results and noted that profits have declined over all from the pervious year.
However, with recent news that the number of closures amongst US banks has reached more than one hundred, the ABA believes that Australian banks have endured the ultimate stress test of the global financial crisis to emerge strong and still delivering profits.
The ABA said that the profit attributable to ordinary shareholders was down 20 percent over the past year; this includes the impact from one-off events such as provisions and the effect of market-to-market accounting.
Cash earnings overall were down 3.5 percent.
David Bell, chief executive officer, ABA, said that in a very difficult year in which the impacts of the global financial crisis continued to affect the economy, Australian banks continued to deliver profits but not as high as last year.
This performance contrasts with some overseas banks only just recovering this year from the global financial crisis to report negligible profits and others ordered by regulators to sell off assets to repay debt provided by Governments, Mr Bell added.
The Reserve Bank recently concluded that an important reason for the profitability of Australian banks is the unusually low bad debt experience compared to overseas banks.
However, with recent news that the number of closures amongst US banks has reached more than one hundred, the ABA believes that Australian banks have endured the ultimate stress test of the global financial crisis to emerge strong and still delivering profits.
The ABA said that the profit attributable to ordinary shareholders was down 20 percent over the past year; this includes the impact from one-off events such as provisions and the effect of market-to-market accounting.
Cash earnings overall were down 3.5 percent.
David Bell, chief executive officer, ABA, said that in a very difficult year in which the impacts of the global financial crisis continued to affect the economy, Australian banks continued to deliver profits but not as high as last year.
This performance contrasts with some overseas banks only just recovering this year from the global financial crisis to report negligible profits and others ordered by regulators to sell off assets to repay debt provided by Governments, Mr Bell added.
The Reserve Bank recently concluded that an important reason for the profitability of Australian banks is the unusually low bad debt experience compared to overseas banks.
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