Lenders rack up extra $30 billion in profits

Australian lenders saw profits soar by nearly 20% in the last year - and non-majors are driving the charge.

Lenders rack up extra $30 billion in profits
Australian lenders saw a 17.7% increase in profits on last year, boosting total profits after tax to $29.9bn.

According to the latest APRA statistics, profits fell slightly in the September quarter from $8.2bn to $7.6bn, but the year’s profits were still $4.5bn up on last year.

Major banks also saw their residential term loans increase by $63bn, a 7.2% increase on last year.

The largest percentage increase, however came from the non-major banks, who saw a more than 20% rise in residential term loans – up $20.2bn on last year’s figures.

Credit unions were the only ADI to see a reduction in residential term loan volumes, but this disparity is likely due to the conversion of eight credit unions into banks over the past year, according to the report.

The proportion of housing loans written with an LVR above 80% also rose slightly in the September quarter to 35%, up from 32% of all loans written in the June quarter. In the September quarter of 2012 loans with an LVR above 80% accounted for 33% of all loans written.

Last quarter, loans with LVRs between 80-90% accounted for 21% of all loans, with those above 90% making up another 14%.

A total of $76.6 billion of new residential loans were approved.

Lenders approved $2.3 billion of residential loans (three per cent by value) outside serviceability, which means that the lender considered that an exception to its serviceability test was appropriate.

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