Major Australian Banks: Half Year 2015 Results Analysis

Major Australian Banks: Half Year 2015 Results Analysis

The Australian major banks (‘the majors’) reported a mixed financial result for the first half of 2015, maintaining momentum in lending growth and preserving asset quality, although downward pressure on margins, returns and regulatory uncertainty continue to dominate the landscape.

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Major Australian Banks: Half Year 2015 Results Summary

The majors reported a cash profit after tax of $15.4 billion for the 2015 half year, up 10.7 percent, aided by a strong housing market, continued low impairments and favourable funding conditions.

Key components of the results

  • Solid balance sheet momentum for the majors, with housing credit growth of 4.6 percent and non-housing credit continuing to improve, rising 5.9 percent. Deposits also grew strongly, rising by 5.4 percent.
  • Margin compression has continued, with the majors recording an average net interest margin of 204 basis points, down 3 basis points compared to the second half of 2014, arising from competitive pressures, higher holdings of liquid assets and the prevailing low interest rate environment.
  • Significantly increased regulatory capital requirements are impacting returns, with the majors’ returns on equity falling by 45 basis points to an average ROE of 16.4 percent for the half year. 
  • The average cost-to-income ratio increased across the majors to 43.7 percent (excluding NAB), driven by the need for banks to invest in meeting regulatory compliance obligations and enhancing their digital capabilities.

Download the Accompanying Major Banks key statistics and ratios (PDF 71KB).

Major Australian banks' results

KPMG’s Major Australian Banks Results Analysis examines the financial results of the four major Australian banks.

 
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