The four major banks reported a combined profit after tax of $ 29.8 billion, which remained broadly flat with a marginal reduction of 0.5% percent compared to FY24. Return on Average Equity decreased by 500 basis points to an average of 10.7%.
Our analysis includes insights and future predictions on the state and direction of the four major banks, and the banking sector in Australia more broadly.
Results summary
- Income
- Costs
- Liquidity
- Asset quality
- Shareholder returns
Income
Total operating income increased to $93.9 billion from $89.9 billion in FY24, with net interest income also increasing by 5.9% to $78.8 billion compared with FY24. The Majors cited higher earnings due to volume growth in home and business lending despite ongoing strong competition. This resulted in average Net Interest Margin (NIM) increasing by 3 basis points to 183 basis points. The Majors reported growth in total assets of 5.3 percent over the last 12 months, with loan portfolios growing 5.5 percent. Business lending was a key driver of growth with portfolios increasing by 10.5 percent, while consumer lending grew by 4.8 percent. Fees and commission income, which makes up 9.4% of the Majors’ total income, remained flat compared to FY24. This is primarily driven by lower fee income in business lending, partially offset by higher card fee income and increased trading activity in the wealth business. |
Costs
The average cost to income ratio increased by 3.8% to 51.8% from FY24. This is in line with the overall increase in total operating expenses by 9.7% to $48.3 billion, driven by inflation on core expenses such as personnel. Over the past 12 months, the total headcount increased by approximately 3.3% and personnel expenses increased by 7.8% to a total of $27.4 billion. The overall investment spend also increased by 10.7%, with technology expenses increasing by 10.5% to $9.9 billion. The Majors are accelerating their digital transformation efforts in response to growing customer demand for innovative banking solutions, with a heightened emphasis on the adoption of Generative AI technologies. |
Liquidity
Capital and liquidity ratios remain well above regulatory minimums, demonstrating balance sheet and liquidity strength. The average Liquidity Coverage Ratio (LCR) has marginally decreased by 75 basis points to 134%, from FY24. The average Common Equity Tier 1 (CET1) is 12.1%, a decrease of 20 basis point compared with FY24. While the average leverage ratio decreased by 25 basis points from FY24 to 4.8%, it is still well above the 3.5% APRA minimum requirement across the Majors. |
Asset quality
The Majors’ expected credit loss (ECL) provisions increased by 2.8% in FY25 to $22.3 billion, which was largely in line with the overall portfolio growth. ECL as a percentage of gross loans and advances reduced marginally by 7 basis points from FY24 to an average of 0.64 percent. The Majors cited continued growth in house prices and customer resilience despite the ongoing cost-of-living pressures. Despite overall stability in credit quality, non-performing loans represent an increasing share of the portfolio across the Majors. Additionally, the Majors’ stressed credit exposures in business lending are primarily concentrated in the sectors of construction and agriculture. |
Shareholder returns
Return on Average Equity decreased in FY25 compared to FY24 by 500 basis points to an average of 10.7%. The Majors declared higher dividends in FY25 with an increase in the average dividend per share of 2.4% compared to FY24. The Majors carried out $1.3 billion in share buybacks in FY25, which in total is lower than FY24. |
Download results snapshot
Big 4 banks’ results: KPMG’s insights
- Digital transformation
- AI & emerging technology
- Risk and regulation
- Financial crime
- Cyber security
- Value creation from deals
Digital transformation: banks bet big on tech and trust
Digital transformation continues to reshape the banking landscape, highlighting the crucial interplay between technological innovation, customer centricity, and embedding security and trust.
In the first half of 2025, technology spend increased by 10.7% to $4.3 billion, reflecting a sustained commitment to digital investment in response to rising competition and to generate longer-term efficiencies. Banks are accelerating their adoption of emerging technologies, such as AI agents and machine learning, to streamline operations, reduce costs, and deliver more personalised and convenient services to customers.
According to the KPMG Global tech report 2025: Financial services insights, 92% of financial institutions globally have realised profits from their AI investments in the past two years, though only a third have achieved this at scale. And, to fully realise the potential of technology investments, value must remain on the table. This means an ongoing focus on the planning, sequencing and coordination of broader business integration and change across the value chain.
Notably, 81% of banking and insurance CEOs now see generative AI as a leading investment focus. However, the sector continues to face challenges in scaling digital innovation, particularly due to skills shortages – only 16% of organisations feel their workforce is well-equipped to implement generative AI – and increasing regulatory complexity.
"Digital transformation will shape operations functions in FY26 and beyond. Banks must reimagine their service operations to stay relevant, efficient and resilient."
AI agents: from theory to value
Banks globally are now redefining how work gets done with agentic AI. Where generative AI augmented and enabled team members with access to information and guidance, agentic AI, or AI agents, can fully automate workflows by taking actions to deliver prescribed business outcomes. AI agents are enabling banks to expand work that can be automated and are emerging in key areas – including risk and compliance, financial crime and fraud prevention and technology delivery.
While still early days, agentic AI is showing great promise, and in our recent US survey we found that 42% of US organisations have already deployed some agents. There are lessons Australian banks can learn from the challenges faced by early adopters, in particular around data quality and cyber security, the complexity of agentic systems and technical skill gaps.
In addition to skill and technical considerations, banks should also be considering how to build trust in AI. Our recent Trust in AI Study found that while AI use is high, trust and literacy levels are low in Australia. Concerns about AI risks are prevalent, highlighting the need for banks to consider effective governance and assurance mechanisms when designing, building and deploying AI agents.
"AI agents are reshaping banking and enabling new levels of automation, especially across technology, risk and finance."
Riding the regulatory wave in banking
Australia’s banking environment remains meaningfully challenged by new regulation and higher expectations of regulators and the associated implications. This is especially true for Operational Resilience (CPS 230) which requires institutions to significantly strengthen their protection of customers. Read our detailed paper and insights about the final CPS 230 rule.
Yet not all themes in the regulatory and risk landscape are negative. Thoughtful and outcome-focused approaches to new or enhanced rules can yield genuine benefits to banks – some are even positioning it as a competitive advantage. For example, a more resilient organisation helps retain customers, protect reputational risk and preserve shareholder value, particularly when there are increasingly more highly publicised cases of resilience issues. Being ‘safe’ in a period of instability is a major selling proposition.
Exciting developments in AI are also leading to genuine and tested examples of banks using sophisticated technology for identifying and improving their controls for managing regulatory obligations and risks – reducing risk, increasing efficiency and providing a more rewarding value proposition to employees who can direct their energy to more valued and fulfilling activities.
"Technology is revolutionising risk management and compliance by delivering actionable insights and fostering sustainable practices. By leveraging advanced analytics, banks can enhance transparency, streamline processes, and build trust with stakeholders."
Financial crime: a smarter threat demanding smarter defences from banks
Financial crime remains one of the most significant risks facing banks, financial institutions, and the global economy. As criminal networks become more sophisticated, the role of financial institutions has never been more critical in preventing, detecting, and deterring illicit activity.
A major challenge lies in striking the right balance – meeting ever-tightening regulatory demands and managing the rising costs of compliance, while continuing to deliver seamless customer experiences, drive innovation, and maintain operational efficiency. It’s a complex environment, but getting financial crime compliance wrong is simply not an option.
To stay ahead, banks must evolve beyond traditional methods and legacy technology. Embracing modern, intelligent, and data-driven solutions is key to achieving more effective, efficient, and dynamic onboarding, detection, and prevention – protecting not just institutions, but the integrity of the global financial system.
"The next era of financial crime prevention hinges on smarter technology, stronger partnerships, and the power of real-time risk intelligence."
Cyber security priorities in evolving threat landscape for banks
Realising the value of significant cyber security investment often means major banks must continuously demonstrate how they’re optimising their solutions, services and teams to reduce risk in an evolving threat landscape.
Despite cyber security being a priority for financial institutions, the current economic climate is placing increasing cost pressure on CISO budgets. In fact, many are seeing flat budgets, with some of that spend diverted to innovation, particularly AI and automation solutions. CISOs must be strategic with their investment decisions to proactively predict and mitigate risks.
The rapid adoption of gen AI and machine learning presents advantage with automation and a new hurdle for banks in combatting sophisticated attacks. A business with a security-conscious mindset, where secure-by-design principles are embedded into the fabric of the organisation, is no longer optional – it’s essential in maintaining trust, resilience, and regulatory compliance in the era of disruption.
"Banks must continue modernising their cyber strategy to balance the benefits of automation and AI adoption, whilst navigating an evolving threat landscape with increasing cost pressure."
Strategic transactions unlocking value for banking
True value creation for banking lies in business model transformation, helping institutions adapt to rapidly changing market dynamics, evolving customer expectations, and emerging technologies. A good example of this is NAB’s acquisition of Citibank’s Australian retail assets and 86 400. The 86 400 transaction provided NAB with a proven and advanced technology capability and speed to market to enhance and replatform its UBank offering, while the Citibank acquisition enabled NAB to scale its credit card platform and support broader replatforming initiatives.
Digital transformations are changing the industry, financial institution structures, teams and how they engage with and deliver services and products to customers.
Strategic M&A can act as a catalyst for transformation, offering financial institutions the chance to quickly enhance capabilities, expand specific business segments, consolidate market positions and leverage the associated costs of transformation through inorganic growth opportunities.
Besides systemic changes from technology, the market faces higher competition, broker vs proprietary channel mix challenges across asset classes, and the evolution of non-traditional entrants. Established approaches to strategy, M&A and, in turn, development of the investment case and transaction execution are no longer sufficient in today’s environment.
"Transactions should align with core strategy – unlocking synergies, accelerating transformation, and driving innovation that delivers measurable impact."
Interactive banking results dashboard
Compare and analyse the results of the four major banks’ historical data starting from 2013 and including income, costs, liquidity, asset quality and returns. Also select to view half year or full year reporting metrics.
This historical data is drawn from major bank financial statements and disclosures, augmented with APRA financial statistics.
Connect with KPMG’s banking specialists
To find out more about the Australian big four major banks’ 2025 results summary, or learn more about Australia’s banking industry, contact KPMG’s banking specialists.
- david
- sue
- adrian
- maria
- brad
- matt
- anubha
- paul
- kim
KPMG's banking services and insights
Something went wrong
Oops!! Something went wrong, please try again
Frequently asked questions
Recognised as Australia’s big four major banks, are National Australia Bank (NAB), Commonwealth Bank of Australia (CBA), Australia and New Zealand Banking Group (ANZ) and Westpac (WBC). These four banks have historically dominated the Australian banking landscape in terms of market share, revenue and total assets. |
The data is drawn from the big four Australian banks’ financial statements and disclosures, augmented with financial statistics from the Australian Prudential Regulation Authority (APRA). Each year, the big four Australian banks release their half-year reporting around May, and full-year reporting around November, with some variation between the banks’ timings. |
KPMG’s Australian banking dashboard compares the financial performance of the big four banks across 10 years of data, analysing income, cost, liquidity, asset quality and results from both half- and full-year reporting. |
Net interest margins (NIMs) are crucial metrics for assessing the performance of the big four Australian banks. NIMs measure the difference between the interest income generated by the banks and the interest paid to their depositors. KPMG analyses the NIMs of the four major banks to provide insights into their financial performance. |
The cost to income ratio measures the big four major banks’ efficiency in managing operating expenses relative to income. A lower ratio indicates higher efficiency and better cost management, which directly impacts profitability. |
The profitability of the big four banks is assessed using metrics like return on equity and net interest margin. KPMG’s dashboard enables direct comparison across these key financial indicators.
Recent trends among the four major banks include digital transformation, cost optimisation, and shifts in lending portfolios. KPMG tracks these developments across the big 4 banks using financial and strategic data.
KPMG evaluates the big 4 banks using historical financial data, regulatory disclosures, and key performance ratios. The dashboard offers insights into how the four major banks adapt to market and regulatory changes.
Register for dashboard access
Please complete the short form below to receive access to the KPMG major banks dashboard.