Australian banks are very profitable by world standards.

In their latest reporting year, the big four banks made aggregate pre-tax profits of $44.6 billion.

The big four banks rank among the top seven listed companies in Australia when ranked by their profit.

If ranked by capitalisation the big four banks are among the top six listed companies.

Among their activities, these high profits reflect the high profit margins (1.59%) applied by the big four banks to owner-occupier housing loans, which are higher than the profit margins of all banks (1.24%).

Between them, the big four banks extracted approx $17.6 billion profit from households with owner-occupier home loans in 2023-24.

That means the profit on owner-occupied housing loans is 39.5% of the big four’s total profit while those loans are just 24.6% of their business.

Australia Institute research shows the big four banks take profit of approximately $9,130 in the first year from households with an average owner-occupier home loan.

This is $761 each month, or $176 per week, from homeowners.

Over the life of an average 30-year loan, that will amount to $200,880. This is almost 35% of the average
mortgage.