The Australian Bankers' Association has again sprung to the defence of bank profits in the wake of the reporting season.
All four of the major banks reported record profits, but ABA chief executive Steve Munchenberg has defended the results, claiming the profits are not excessive.
"There is no evidence banks are making excessive profits. A standard measure of profitability – return on equity – shows banks are in the middle of the pack compared to other industries. Of the 50 most profitable companies listed on the ASX, only two are banks," Munchenberg said.
Munchenberg argued that bank revenue was "relatively low" compared to the size of the companies' asset base.
"Profits represent just 1% of bank assets," Munchenberg said.
Munchenberg again pointed to the tax burden upon banks, reiterating his claim that banks contributed more corporate tax than any other industry in Australia. He also contended that bank profits were vital to superannuation.
"Bank shares are a mainstay of super fund investment given the stability of earnings and relatively high dividends. These returns help people earn income for their retirement. Banks have paid out $50 billion of dividends to shareholders over the past three years," he remarked.
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