Sydney, 31 October, 2008: The reporting season for Australian banks is coming to an end and it shows Australian banks are withstanding the global financial crisis, remaining profitable and strong.
Australian Bankers’ Association (ABA) analysis of Australia's retail banks’ annual results showed their profits declined by around 2% in 2008 compared with 2007.
David Bell, Chief Executive of the ABA, said: "In a very difficult year in which we have experienced the worst global financial crisis since the 1930s, Australian banks have continued to deliver solid profits, although not as high as last year.”
“This performance contrasts with many other countries which have seen bank profits completely wiped out and banks supported by taxpayers’ funds, while Australian banks have performed exceptionally well."
The Australian banking sector continues to provide core banking services to the community – operating accounts and making loans.
The Reserve Bank recently concluded that an important reason for the profitability of Australian banks is the unusually low bad debt experience1 .
Mr Bell said: “The arrears rates on home loans made by banks in Australia are very low – less than one percent. In the United States arrears rates are five or six times higher than that.”
Profits created by Australian banks are crucial to the returns of Australia’s superannuation funds which assist Australians saving for retirement and provide income for retirees. Dividend payouts to ordinary shareholders increased by 11% over the past year to more than $15 billion.
Finally, in an environment which has seen employment reductions in the banking sector in other countries, employment at the main Australian retail banks showed a small increase of 1% over the past year.
For further information:
Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439
ENDS