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 report, Major Australian banks: Half Year 2022 Results Analysis, provides the full commentary and insights.
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
Note: Comparisons are to the 2021 financial year, adjusted for restatements as applicable
^includes notable items
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