The Australian major banks have reported a combined cash profit after tax from continuing operations of $14.5 billion for the first half of 2019, down 4.0 percent (compared to first half of 2018). We analyse the four major Australian banks’ half year financial results for 2019.
Australian major banks have reported a continued decline in aggregate cash profits for the first half of 2019, as they face challenging conditions from slowing lending growth and margin compression, at the same time as delinquencies rise in a softer domestic economy. In addition, remediation costs are a major contributor of performance, as the banks seek to rebuild trust with customers post the Royal Commission.
The majors have continued to allocate a greater proportion of their spending towards risk and compliance, rising substantially to comprise almost 40 percent of the majors’ total investment expenditure for the first half of 2019. Faced with growing competition from non-bank lenders and new entrants, the majors will need to balance this investment profile with digitalisation and innovation to maintain market share and deliver an enhanced customer experience.
Read our media release – Major banks confront challenging conditions in half year analysis