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Australian banks still among most profitable in the world

Australian banks still among most profitable in the world

(30 June 2015 – Australia) Australian banks remain among the most profitable lenders in the developed world, with the big four recording the highest return on assets when compared with major banks from 10 other wealthy economies and some emerging markets.

Figures from the Bank for International Settlements (BIS) showed the banks’ pre-tax profits as a percentage of their assets was 1.28 percent in 2014, putting them ahead of banks from other developed countries included in the BIS annual report.

Australian banks were not as profitable as those from the emerging markets Brazil and China, which notched up profits that were 1.66 per cent and 1.83 per cent of assets, respectively.

The figures highlight the strong state of the Australian banking sector, and it is the fifth year in a row in which the big four bank's profitability has been ranked higher than other developed nations.

The next most profitable developed world banks were in the United States, where earnings were 1.11 percent of assets and Canada, where the figure was 1.06 percent.

Australian banks' average net interest margins – a measure of bank funding costs compared with what they are charging for loans – fell to 1.75 percent, the report said.

This was lower than all of the emerging markets banks and the US and Spain.

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