Australian banks lead world in profits
(27 June 2011 – Australia) The latest annual report by the Bank of International Settlements (BIS) has shown Australia’s big four banks are some of the most profitable in the world.
According to the report, the banks continue to boast some of the widest interest margins of global peers which could rekindle scepticism on the profitability of Australia’s largest banks.
BIS, often described as the world's central bank, has also called on countries with a profitable banking sector to accelerate the introduction of the tough new Basel 3 standards on bank capital.
According to the BIS study of the world's banking profits, the pre-tax profits of Australia's big four was the equivalent of 1.14 percent of their total assets. This is ahead of the second-placed US banks on 1.02 percent and more than four times the rate of profitability of the British and German banks.
The study also showed Australian banks ranked fourth on interest margins - a key driver of profit - with average interest margins of 1.89 percent. Leading the pack were large US lenders, with 2.62 percent margins, followed by Spanish and Austrian banks with margins of 2.5 and 2.2 percent.
At the weekend, a BIS committee, the Basel Committee on Banking Supervision, proposed that the world's largest and most complex banks would need to hold a reserve of high-quality capital of between 1 and 2.5 percent of their assets to cope with any unforeseen losses. That would be on top of their proposed minimum capital levels for all banks, currently set at 7 percent of assets.
BIS, often described as the world's central bank, has also called on countries with a profitable banking sector to accelerate the introduction of the tough new Basel 3 standards on bank capital.
According to the BIS study of the world's banking profits, the pre-tax profits of Australia's big four was the equivalent of 1.14 percent of their total assets. This is ahead of the second-placed US banks on 1.02 percent and more than four times the rate of profitability of the British and German banks.
The study also showed Australian banks ranked fourth on interest margins - a key driver of profit - with average interest margins of 1.89 percent. Leading the pack were large US lenders, with 2.62 percent margins, followed by Spanish and Austrian banks with margins of 2.5 and 2.2 percent.
At the weekend, a BIS committee, the Basel Committee on Banking Supervision, proposed that the world's largest and most complex banks would need to hold a reserve of high-quality capital of between 1 and 2.5 percent of their assets to cope with any unforeseen losses. That would be on top of their proposed minimum capital levels for all banks, currently set at 7 percent of assets.
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