Lobby group laments criticism over bank super profits

Kieran Salsone

THE lobby group representing Australia's banks has urged people to think twice before criticising banks for making record profits.

ANZ on Thursday recorded a record full-year cash profit of $6 billion - up 6% on the previous 12 months.

The result, which was better than most economists had forecast, came a day after the Australian Bankers' Association launched a pre-emptive defence of bank profits ahead of the reporting season.

ABA chief executive Steven Münchenberg said it was "important banks are profitable".

"Australia's banking sector is an important contributor to our country's economic growth," Mr Münchenberg said.

"In 2011, the finance and insurance industry contributed $129.8 billion to our economy - that's about 10% of GDP, according to data from the Australian Bureau of Statistics.

"Banks employed more than 211,000 people across the country; paid $15.8billion in dividends to shareholders."

Mr Münchenberg said it was important for Australia to avoid becoming complacent.

He said Australia's banks needed to remain "solid and reliable" as the effects of the global financial crisis continued to batter Europe, the United States and the United Kingdom.

"Unlike overseas, banks here did not fail, nor did they require government bail-outs.

"Australia's healthy banks continue to keep our savings safe and to make loans which keep the Australian economy moving."

With the onset of the reporting season, the ABA has produced a factsheet to outline why bank profits are "important".

"When commentating on banks' profits it's useful to look at some benchmarks. For example, when looking at return on equity, only two banks feature in the 50 most profitable listed companies in Australia," Mr Münchenberg said.

"When viewed against the size of the banks' asset bases, revenue is relatively low. Revenue is only about 6.7% of total bank assets. Profits represent just 1% of bank assets."

Read the 14-page fact sheet

Recent research showed Australia's big four banks were slow to pass on Reserve Bank cash rate cuts.

The research also showed banks failed to pass on the full value of cuts, while hiking rates in excess of any RBA decisions to raise rates.

But ANZ CEO Mike Smith defended his bank's decision not to pass on the most recent cash rate cut in full, despite the record profit.

"We have to look at our own funding costs in terms of what it costs us to raise the money to what we then pass on to people who borrow money from us," Mr Smith said.

"And in terms of how much we can pass on, in terms of an official rate cut, that will depend on how the market is performing."

None of the big four banks passed on the recent rate cut in full.

The ANZ profit came after the Commonwealth Bank announced an 11% jump in profits to $7.1 billion in August.

ANZ shareholders will be paid a dividend of $1.45 per share. The bank's share price was down slightly at the close on Thursday.

Topics:  anz big banks profits

The wild adventures of Warwick's travelling meerkats

Dave and Daisy are supervised by Donna Cecil and Jodie Locke.

FOR meerkats Dave and Daisy, Warwick is as a good a home as any.

$77,000 war memorial project in the pipleline

Jack O'Dea, of the Warwick Army Cadet unit, rests on arms reversed as part of the catafalque party at the Warwick war memorial, Anzac Day 2016.

LESLIE Park could soon home a new and impressivve War Memorial Wall.

Bullock team delight the crowd at heavy horse day

The bullock team steps out at the Yangan Heavy Horse Day.

Bullocks debut at Yangan Heavy Horse Day

Local Partners

Australia Day Award nominations now open

ALL those who know someone who has made an outstanding contribution to the Warwick community is encouraged to nominate them for an Australia Day Award.

Former Split Enz front man Tim Finn finds new niche

Singer Tim Finn has written the music for theatre production Ladies in Black.

Musician finds his way to theatre

Former Warwick State High student is second

Victorian rider and former Warwick High student Lee Kimber (right) goes for his beast at the Warwick Rodeo.

Former Warwick High student to compete in national finals

13 things to do on the Southern Downs this weekend

Darcy Meek (left) is the early leader in parkrun on Saturday before being first man home.

Photo Gerard Walsh / Warwick Daily News

Here's a list of 13 things to do this weekend.

Check out some fashions from the Coast festival

FASHION: Ocean Zen range.

Images from the Sunshine Coast Fashion Festival show what's hot

Australian Survivor's magician Matt out of tricks

Australian Survivor contestant Matt Tarrant.

SHOW'S power couple looks unstoppable in race to the finish.

Top floor teams take out The Block's terrace week

Kim and Chris pictured on their winning outdoor terrace in a scene from The Block.

RIVALS Kim and Chris and Julia and Sasha tie in final week of work.

Bob Dylan slammed as 'arrogant' for Nobel silence

Nobel Prize winner Bob Dylan.

Singer the controversial winner of literature Nobel

Shannen Doherty reveals fear of dying in post on chemo

Actor Shannen Doherty shared this image of her lying in a hospital bed after a chemotherapy session.

Actor has been fighting cancer since 2015

Eddie Redmayne's stage fright on latest Harry Potter film

Actor Eddie Redmayne stars in Fantastic Beasts and Where to Find Them.

Actor felt like kid again when he got to film with a wand

Hinterland horse stud passed in for $8.25 million

UNREAL: This Maleny estate is incredible.

12-bedroom hinterland horse stud still available

Hit songwriter's Noosa mansion on market

SPECIAL PLACE: The Cintamani estate is going to tender, marketed by Tom Offermann Real Estate.

Is this Queensland's best property?

Kiwi siblings snap up Dotcom mansion for $32.5m

The new toy company owners of the Coatesville mansion want replace any controversy with positivity and fun. Photo / Barfoot and Thompson

The trio paid $32.5 million for the property in June

New $200 million development will create 580 jobs

Cassie And Josh with baby Alfie and daughter Andee. They have bought at new Lennox Head development Epiq.

Majority of new positions will be given to Northern Rivers locals

Cherrabah's mega resort plans axed

PLANS for a massive development at Cherrabah have been scrapped.

What our mayor thinks of the new draft SEQPlan

The plan to use the innovative technology as part of the new Maroochydore CBD was cemented on site today when Mayor Mark Jamieson and Envac Asia Region president Chun Yong Ha formally signed the contract for the $20 million underground waste collection system.

New plan accommodates Sunshine Coast Council's vision for growth.