Record bank profits a “political football” - NAB chair
(16 December 2011 — Australia) Criticism over record bank profits and mortgage rates are frustrating according to National Australia Bank (NAB)’s chairman Michael Chaney.
'It is very disappointing that all parties in the federal Parliament see it as being in their interest to use banks as political football,' he said.
The big four banks have racked up a record A$25 billion in combined profits this year, in stark contrast to their struggling global rivals but now face challenges from surging funding costs and demand for home loans at a more than three-decade low.
Last month NAB reported a 19.2 percent increase in cash earnings to A$5.5 billion.
Chaney argued the return on equity for banks was just above average compared with other Australian-listed companies, with the average profitability of the top 10 companies nearly twice that of the banks.
Chaney said volatile global markets were pushing up the cost of funds and 2012 would be a challenging year. His sentiments echo Westpac Chief Gail Kelly’s views.
At the NAB annual general meeting in Adelaide on Thursday Chaney also said new global banking regulatory requirements have pushed up the cost of funds and the current instability in Europe presents the bank with additional pressures in the wholesale term funding markets.
An agreement at last week’s European Union summit to implement a closer fiscal union was an important step in resolving the debt crisis, but it was primarily focused on long-term objectives and did not provide a clear solution for the short term," Chaney said.
‘‘It leaves unanswered questions about immediate relief or stimulus to generate growth.’’
NAB's chief executive, Cameron Clyne, confirmed pressure remains on the bank’s profit margins with Europe’s debt crisis causing havoc on global money markets.
This pressure has forced the bank to take a cautious approach following the recent round of cash rate cuts by the Reserve Bank of Australia (RBA), Clyne told shareholders at the bank’s annual meeting.
The big four banks have racked up a record A$25 billion in combined profits this year, in stark contrast to their struggling global rivals but now face challenges from surging funding costs and demand for home loans at a more than three-decade low.
Last month NAB reported a 19.2 percent increase in cash earnings to A$5.5 billion.
Chaney argued the return on equity for banks was just above average compared with other Australian-listed companies, with the average profitability of the top 10 companies nearly twice that of the banks.
Chaney said volatile global markets were pushing up the cost of funds and 2012 would be a challenging year. His sentiments echo Westpac Chief Gail Kelly’s views.
At the NAB annual general meeting in Adelaide on Thursday Chaney also said new global banking regulatory requirements have pushed up the cost of funds and the current instability in Europe presents the bank with additional pressures in the wholesale term funding markets.
An agreement at last week’s European Union summit to implement a closer fiscal union was an important step in resolving the debt crisis, but it was primarily focused on long-term objectives and did not provide a clear solution for the short term," Chaney said.
‘‘It leaves unanswered questions about immediate relief or stimulus to generate growth.’’
NAB's chief executive, Cameron Clyne, confirmed pressure remains on the bank’s profit margins with Europe’s debt crisis causing havoc on global money markets.
This pressure has forced the bank to take a cautious approach following the recent round of cash rate cuts by the Reserve Bank of Australia (RBA), Clyne told shareholders at the bank’s annual meeting.
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