IMF study confirms super profits of Australia’s banks

IMF study confirms super profits of Australia’s banks A new study by the International Monetary Fund shows that Australia’s ‘big four’ banks are the most concentrated in the world and are among the most profitable in the world. The IMF today released its Financial System Stability Assessment for Australia . The following graph (to see graph download media release) shows where Australia’s big four rank in terms of share of total industry compared to other countries. “The IMF publication shows the absurdity of claims by the Australian Bankers’ Association’s Steven Munchenberg that Australia’s big banks are ‘fiercely competitive’,” said The Australia Institute’s Senior Research Fellow David Richardson. In fact the IMF said Australian banks enjoy “pricing power” and are “highly profitable”. The IMF’s assessment also said “in fact, Australian banks are currently among the most profitable in the world”. That is clear in the following graph (to see graph download media release) which shows Australia’s big four banks make up half of the eight most profitable banks in the world. “The IMF study confirms the view that high concentration allows banks to extract very high profits from the Australian community. Super profits represent a major challenge for Australian policy makers,” said Mr Richardson. An Australia Institute analysis recently showed that people taking out an average mortgage could potentially save $1,200 per annum by choosing a mutually-owned bank, credit union or building society, instead of one of the big four banks.

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