The majors’ posted cash profit after tax of $27.4 billion for the 2012-2013 full year compared to $25.2 billion in 2011-2012 (an increase of 8.7 percent).
According to KPMG’s National Head of Banking, Ian Pollari, “the majors’ full year results have been driven by strong underlying performance across many businesses, as well as a significant reduction in bad and doubtful debt charges and improved levels of operational efficiency compared to last year”.
KPMG’s ASPAC Head of Banking, Andrew Dickinson, noted “in a challenging environment, the majors’ results reflect management’s dexterity in simultaneously managing the transition to new a regulatory framework, the imperative to reduce costs and invest in customer revenue growth”.
- Margins reduced from an average of 217 basis points in 2011-2012 to 213 basis points in 2012-2013, reflecting the impact of lower cash rates, increased cost of retail deposits and reduced returns on liquid asset holdings.
- Overall decrease in loan impairment charges from $6.2 billion to $5.0 billion. Prudent risk appetite and disciplined lending practices is needed to maintain asset quality going forward.
- Disciplined approach to cost control as the cost to income ratio improved from 47.0 percent to 44.3 percent.
- Improvement in the major banks’ ROE from 15.9 percent to 16.1 percent.
- Continued investment in technology to address the growing preference by consumers to engage with banks using digital channels, e.g. online and mobile.
- Further cost improvements will require more structural changes to banks operating models – simplifying products, standardising processes, migrating transactions to lower cost channels and increasing automation.