Australian Major Banks FY2019 Results
Challenges, choices and complexities Australian major banks F Y2019 results November 2019 “Bankprofitabilityisunderthreat,ROEhashalved overthepast15years.NIMshavehalvedoverthat period.Wearenowmuchclosertoourcostof equity.Theabilitytoholdthemachinetogetheras itis...isunsustainable.Ithinktheideathatthese universal,mass-marketbanksaregoingtocontinue tothrive,Idon’tagreethat’sthecase.Iamnot sayingthere’sgoingtobenone,butIdon’tbelieve thatthisissustainableinthefuture.’’ Shayne Elliott CEO,ANZi Growthwasa challenge Efficiencyiscritical Cashprofitdeclinedby Total income Total expenses declined by 3.7% increased by 0.8% 7.8% Creditriskincreasing Lendinggrowthhasslowed OntracktomeetAPRA’s ‘unquestionablystrong’ (90DPD+GIA)/GLA Total average increased by interest earning CET1 14 bps assets 3.3% target of 10.5% Source:FY2019resultsandinvestorpresentationsforANZ,CBA,NABandWBC:Deloitteanalysis. Challenges, choices and complexities | Australian major banks FY2019 results Majorbanks:FY2019results AtypicalAustralianbankingreportingseasonafewyearsago Ontopofthis,bankshavehadtoimplementAPRA’sBanking wascharacterisedbyhighretailbankingReturnonEquity ExecutiveAccountabilityRegime(BEAR)effectivefrom1July2018. (ROE),positivejaws,lowerbaddebts,andabovesystem Withintensivecompetitivepressuresfrominternationalbanks mortgage growth. and non-traditionalplayers;‘zerobound’interestanddepositrates; SolidGDPgrowth,highimmigrationintake,andaresilientjob highercapitalrequirementsforNZbusinesses;continuedlarge markethaveprovidedafavourablebackdroptotheAustralian remediationprograms,andthepermanentincreaseinregulatory
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