The Australian Prudential Regulation Authority (APRA) has released its latest quarterly performance report for authorised deposit-taking institutions (ADIs), which contains information on ADIs’ financial performance, financial position, capital adequacy, asset quality, liquidity and key financial performance ratios.
The statistics show that for the quarter ending December 2017, ADIs held $4.5 trillion in assets, down by nearly 1 per cent on the same quarter the year before.
However, net profit after tax for the ADIs rose by a substantial 27 per cent (or $7.7 billion) to $36.1 billion. This may partly be attributed to the fact that impaired facilities were down by 23 per cent on the prior comparative period.
The cost-to-income ratio for all ADIs was 48.1 per cent for the year ending 31 December 2017, compared to 47.9 per cent for the year ending 31 December 2016, and the return on equity for all ADIs was 12.3 per cent, up from 10.0 per cent last year.
Mutual banks performed particularly well, with assets rising to $110.7 billion for the quarter ending December 2017, up by $7 billion on the December 2016 figures.
APRA figures also show that housing loan growth outpaced that of the banks’ collective figure, with the customer-owned banks growing by 6.7 per cent per annum instead of the overall figure of 4.1 per cent.
Further, deposits grew by 7.7 per cent (while all bank growth was just 2.5 per cent per annum).
The Customer Owned Banking Association welcomed the news, adding that the figures indicate a strong 2018 ahead for the customer-owned banking sector.
“Customer-owned banking continues to grow and deliver a competitive alternative for millions of Australians,” COBA CEO Michael Lawrence said.
“Australian consumers looking to change banks stand to benefit by taking a little time to check out the full range of products on offer from mutual banks, credit unions and building societies in capital cities and in regional Australia.
“[These] APRA figures demonstrate that the sector is taking up opportunities to deliver more for Australian consumers, including helping them into home ownership.”
Mr Lawrence concluded: “These are encouraging results for customer-owned banking.”
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Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.