Major Banks Analysis

Banking on change

Welcome to Major Banks May 2014 - our analysis of the major banks' half-year results.

It's been another strong start to the year for Australia’s four major banks who have delivered combined underlying cash earnings of $14.8billion, despite margins shrinking to 2.08 per cent, close to the all-time low.

Roughly 60 per cent of the improvement in cash earnings has been driven by reduced bad debt, both for the half-year and full-year. Additionally, strong lending volumes helped overcome the fall in margins with credit growth hitting a five-year high, up 4.4 per cent to $2.2 trillion for the year to March.

In this issue we discuss the results, provide an outlook for the sector and place a spotlight on the Financial System Inquiry and customer engagement.

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