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Banking Matters

PwC's Banking Matters provides in-depth analysis of the financial results of the major Australian banks and also explores current and future banking trends from Australia and across our global network.

Current edition

Major Banks Analysis

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The window of opportunity: recovery sets stage for delivery with purposeful ambition.

Improved results driven by a rebounding economy and significantly-improved outlook, though significant challenges and risks remain; it’s a time for determined execution and purposeful ambition.

The major Australian banks delivered dramatically improved financial results in 1H21, buoyed by lower (but persistent) notable charges and by positive adjustments to credit provisions as the economic recovery and outlook brightened. The results also demonstrate that long-term trends remain real and some have been exacerbated by the pandemic - lower margins and fee base, changing customer and staff preferences, uncertain and uneven credit growth and a cost base that needs to match the future shape of the businesses (including ‘notables’). Continued and determined execution is required to complete what has been started and to capture the many opportunities a recovering Australia presents.  

When it comes to balance sheets, business architecture, and reputation, Australian banks are arguably stronger than they have been in a generation. This, along with the macro outlook for continued global growth, gives us much to be optimistic about. However, this is a time to respect uncertainty. Important risks and challenges remain for the banking industry, and for many of the reasons above, we know the superlative economics which characterised the prior era will not return. There’s a need for determination and resolve. 

But there’s also a need for courage and ambition. Australians and others around the world are showing new resolve as we emerge from the COVID-19 crisis, and are looking to their institutions to address some of our most profound and longstanding challenges. 

The Australian banking system has a critical role to play, and especially the major Australian banks. Along with determination and resolve, it could also be a time for courage, imagination and ambition. 



Hot Topic: The rate that stops a nation?

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Preparing for lower or even negative rates in Australia

On Melbourne Cup Day, and again in December, many bankers breathed a sigh of relief when the Reserve Bank of Australia (RBA) announced a pause in the rate cutting which has taken the cash rate to 0.75%, with many expecting it to go lower to 0.25% within the next year.

Although the RBA downplay the possibility, Australians need to confront the very real scenario of interest rates going to zero or below, something that has already occurred overseas.

Australian banks, investors, businesses and other stakeholders now need to understand how negative rates are possible, what they mean for them, and how to prepare for a future economy which will look very different from the one they’ve known for a long time.

In our latest Banking Matters Hot Topic we explore the implications of negative interest rates (NIR) on banks and the Australian economy more broadly, and address four key points around NIR:

  • Capitalism won’t break, and rates can go negative
  • Serious financial challenges from negative interest rates
  • Three kinds of readiness required from banks and other institutions
  • 'No-regrets' actions to take now to ensure preparedness


Banking Matters

PwC's Banking Matters series incorporates our regular Major Banks Analysis and industry Hot Topic.

Our Major Banks Analysis provides in-depth analysis and commentary of the financial results of the four major Australian banks, with insights for local and global banking communities.

Our regular Hot Topic explores current and future banking issues and trends, addressing important challenges, opportunities and imperatives facing the banks including risk, regulation, remediation, transformation, workforce, technology, leadership, executive accountability, pricing and cost management.

At the same time, we bring together the right mix of advisers and contributors from inside and outside of PwC demonstrating that important problems are better solved together. PwC is a powerful multiplier of connections and innovation, we bring passionate people together so that insights become impact, opportunities become outcomes and society benefits.

We call this, The Together Effect.

Contact us

Sam Garland

Banking and Capital Markets Leader, PwC Australia

Tel: +61 3 8603 0639

Julie Coates

Financial Services Industry Leader, PwC Australia

Tel: +61 2 8266 2006

Jim Christodouleas

Banking and Capital Markets Solutions and Capability Leader, PwC Australia

Tel: +61 3 8603 2065

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