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Steven Cross
Australia’s big banks have once again been named the most profitable in the world by Sweden-based Bank of International Settlements.
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The major lenders recorded pre-tax profits equal to 1.19 per cent of their assets in 2011, which is five basis point higher than 2010, beating second placed Canada which posted profits equal to 1.08 per cent of assets.
The report follows claims by CBA to a Senate inquiry that the Australian banking system is lagging behind the rest of the world.
“While Australia's banking system ranks well by international standards for profitability, it falls far short of the top-performing international systems,” the Commonwealth Bank submission said.
The report also found that Australia is has the fourth lowest operating costs of the 13 developed countries included in the report.
Australia’s operating costs were 1.17 per cent of total assets, compared to the United States which of its nine major banks needs 3.23 per cent of assets on average.
However the report claims banks should continue to rein in their costs to remain competitive.
"Since the new regulatory environment will put pressure on their profitability, banks will need to adopt more aggressive cost management strategies than in the past," the report said.
