Australian major banks FY2019 results

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Australian major banks FY2019 results

Challenges, choices and complexities

Australian banks are facing unprecedented challenges forcing choices to cut through the complexity. With interest rates suppressing net interest margins (NIM) and return on equity (ROE), the banks have delivered declining profit margins and are building resilience as they prepare for diminished revenue growth.

Higher capital requirements, elevated risk and compliance costs, and rising remediation costs have all increased the cost of doing business.

With Open Banking on the horizon and the need for strategic cost transformation, the majors are making substantial investments in technology to deliver simplicity, transparency and earn back trust.

Download our report to read how the majors stack up against each other across the growth, efficiency, quality & risk, and capital & funding dimensions.

In each section we compare the majors and pose a series of questions aimed at assisting them to meet the challenges, manage the complexities and make the appropriate choices.

Challenges, choices and complexities

Download the report

Growth

FY2019 has been a challenging year for the majors, with NIM declining and growth slowing. Fee income has also taken a hit. ROE’s are now approaching the cost of equity. Remediation and restructuring provisions continue to weigh on bank results and may do so for some time to come.

Efficiency

Given the subdued revenue growth and the challenging operating outlook the majors have had to focus on efficiency and have delivered almost $1.3bn in productivity savings.

Quality & Risk

Asset quality has remained stable across the majors with credit impairment still low. All four banks are now reporting their provisions under the revised AASB 9 Accounting Standard, with banks increasing their provisioning coverage significantly.

Capital & Funding

The four major banks either meet or are on track to meet the ‘unquestionably strong’ CET1 target of 10.5% by January 2020. However, it has not been without its challenges.

Download our Australian Major Bank Half Year Results 2019
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