Sydney, 3 November, 2006: The Australian Bankers’ Association (ABA) says now that the bank reporting period is coming to an end, it is important that all bank customers, shareholders and the wider community understand important facts about bank profits¹.

Some key facts:

1. Banks are not driving increasing profits through charging customers fees on their day-to-day personal transaction accounts. Only 2.6% of bank revenue comes from these fees. This means that 97.4% of revenue comes from lending activities, overseas customers, corporate banking, and other areas such as insurance, superannuation, funds management and foreign exchange.
2. Australians who are building their retirement nest egg through superannuation accounts and other investments are increasingly dependent upon strong business profit growth. In particular, millions of retirees are dependent on dividends from strong companies. Over the past year, the banks have paid around $10 billion in dividends to investors.
3. Banks are an important part of our community and they actively participate in a wide range of community programs. Over the past year, community organisations have received more than $100 million from banks which fund a wide variety of projects.
4. Australian banks will reinvest more than $4 billion back into their business out of this year’s profit outome. This will fund new technology, expansion of the range of products and services offered to customers and staff training and development.
5. One of the key reasons cited as to why Australia was able to withstand the Asian financial crisis was the strength, safety and security of our domestic banks.
6. The reason why banks are profitable is because they are well-run, the Australian economy is very robust and has been growing strongly for more than a decade. The stronger the economy, the wealthier people become, and the more they borrow for housing, other personal goods and invest to provide for their retirement. Similarly, the business environment is also strong which means that businesses invest and grow, as demonstrated by their strong demand for loans and financial products and services.

David Bell, Chief Executive of the ABA, said: “Strong banks are vital to maintaining a thriving Australian economy. Anyone who invests in bank shares or has a retirement fund which invests in bank stocks benefits from bank profits. Customers are provided with a safe, stable, reliable and highly competitive banking system, providing a wide range of products and services."


For further information:

Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439