Australian major banks have reported improved profits and returns for the first half of the financial year 2022, despite ongoing pressure on their interest margins.

After the disruptions of recent years, profits have almost returned to pre-COVID levels with cash profits after tax still slightly down 0.4 percent on the first half 2019 results from three years ago, signalling a relatively flat medium-term growth path. The increase in total operating income (on a cash basis), up 0.8 percent on the first half 2021 and rising from $39.6 billion to $39.9 billion, has been a cause of the growth in cash profits. Off the back of this earnings growth, the Australian major banks return on equity (ROE) has risen to 10.6 percent from 10.4 percent in financial year 2021.

The underlying drivers of the Australian major banks’ operating income growth have been the continued strong volumes in both mortgage and business lending. As Australia powered ahead in the first half of financial year 2022, both areas saw continued high demand. The value of mortgage loans was up 2.5 percent on the second half 2021, growing to $1,812 billion. At the same time, business lending grew 4.8 percent in the last half year, to a figure of $1,077 billion.

Our latest report, Major Australian banks: Half Year 2022 Results Analysis, provides the full commentary and insights. 


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Major Australian Banks

Read the full results analysis for Half Year 2022 in our detailed report



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Results snapshot

An infographic snapshot of the major Australian bank's half year financial results.


REVENUE

Operating income
increased by 0.8% to

🡹 $39.9 billion

Net interest income
increased by 0.2% to

🡹 $32.0 billion


EARNINGS

Cash profit after tax
increased by 5.1% to

🡹 $14.4 billion

Average net interest margin
decreased by 13.0 bps to

🡻 175 bps


SHAREHOLDER RETURNS

Average return on equity^
increased by 0.21% pts to

🡹 10.6%

Average dividend payout ratio
increased by 2.8% pts to

🡹 66.0%


EXPENSES

Average cost to income ratio
decreased by 0.7% pts to

🡻 49.6%

Share of risk and compliance of total investment spend decreased by 1.9% pts to

🡻 48.0%


ASSET QUALITY

Average credit impairment provisions (as % of GLA) decreased by 9 bps to

🡻 0.70%

Write-back of credit provisions of

$218 million


BALANCE SHEET

Average CET1 capital ratio decreased by 90 bps to

🡻 11.8%

Deposit to loan ratio
increased 1.4% pts to

🡹 86.0%

Lending assets
increased by 4.1% to

🡹 $2.9 trillion



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