Australia’s top four banks have posted another year of record earnings, but that strong run could be at risk with interest rates close to a bottom, analysts say.
Westpac, Australia’s second-biggest bank by market value, on Monday unveiled an annual profit of A$7.1 billion (US$6.7 billion), marking its fourth-straight year of record profits.
Cost cutting, a drop in bad loans and a rise in retail deposits have helped Australia’s banks notch up another bumper year – National Australia Bank (NAB) and Australia and New Zealand Banking Group (ANZ) unveiled record profits last week.
“Commonwealth Bank of Australia (CBA) and Westpac have been riding the local economy, riding the property market and have done particularly well,” Lachlan Colquhoun, head of markets analysis at East and Partners, told CNBC. “Whether that will remain into next year; that’s the big question.”