News Limited media ran stories¹ on Sunday sourced from information provided by an academic from the University of Canberra.

Tony Burke, Acting Chief Executive of the ABA, said: “Bank profits are only just recovering from the impact of the global financial crisis (GFC). Compared with the peak reached two years ago, industry profits today are down 22% in annual terms. This contradicts the claim that the sector posted record profits and clearly demonstrates the effect of the GFC.”

“What we have to remember is that our banking sector showed real resilience during the GFC as compared to the US, UK and some parts of Europe, where banks collapsed or had to be nationalised.”

“This shows that for Australia there’s an important social dividend in profitable and well capitalised banks. They underpin economic growth, providing finance to businesses, keeping people employed, protecting savings, and continuing to support the financial decisions of all Australians.”

“It’s disappointing to see this misleading media commentary because it’s important that any public debate be based on facts.

Claim	ABA response
Banks are posting record profits for shareholders	Compared with the peak reached two years ago, industry profits today are down 22%. This is not a record for the industry. Bank profits are recovering, which is for a benefit to workers, families and retirees who rely on investment income for superannuation savings and retirement income.
Far from cutting back during the GFC banks increased remuneration for management and staff  - a 14.2% increase	Australian Bureau of Statistics data show that wages in the finance and insurance industry grew by 2.1% over the 12 months to September 2009, not 14.2%.  This increase was the smallest since 1997.
Total funding costs are falling that means hikes above RBA movements are unnecessary	Funding costs remain at elevated levels and are moving higher due to international market uncertainty because of the sovereign debt issues in Greece. Recent analysis of bank results shows a small fall in interest rate margins. This contradicts the claim that banks are overcharging on interest rates.
Banks hiked fee revenue by $4 billion from $17 billion to $21 billion – customers paid an extra $733 a year	This is in error.  In fact, APRA data show that ‘fee and commission’ income increased by $1 billion not $4 billion.  Additionally, the data are inconsistent with Reserve Bank data which shows that fee income from all banks in 2008 would have been in the order of $11 billion, well below the amount reported. Any suggestion that banks’ 15 million customers have experienced an average $733 increase in costs is erroneous.  The methodology used for such a calculation must be opened up to public scrutiny.  It’s important not to attribute all bank revenue to personal retail customers only, when business customers, large and small, contribute significantly to bank revenue. Banks have been abolishing and reducing fees on accounts, such as exception fees. Increase in bank service fee revenue is driven by business volumes not fee increases.