Australia’s banks chalk up big profits

Australia’s big four banks are still turning  in strong performances, despite the global economic crisis.

They chalked up average profits of 30.6 per cent last year.

The Australian Prudential Regulation Authority also reported yesterday that the total assets of the nation’s big  – and small  – banks rose by 22.1 per cent last year, to almost $3.3 trillion.

APRA also reported that the banks gathered $46.4 billion in interest income last year.

They also charged their customers another $20.9 billion in fees and commissions.

The banks have their critics,  though.

The most notable was the Treasurer, Wayne Swan, who recently called the Commonwealth Bank “selfish” after it had raised a key home loan interest rate by 0.1 percentage points.

However the Commonwealth bank did not retreat, saying it had to cover the higher cost of the funds it now lends.

Other banks later followed its example, in different ways.

Public complaints about the “greed” of Australia’s banks are common, too.

Australia’s banks, though, mostly resisted the trap that US banks fell into, with sub-prime housing loans.

And their strength has been a key factor in Australia’s relatively good performance, at least so far, in the global economic crisis.

Even so, the Federal government felt impelled, earlier this year, to guarantee Australia’s bank deposits.

It did that to prevent a possible panic, which might have produced a run on the nation’s banks, in the wake of the global economic crisis.

That crisis, clearly, still has some way to run.

The World Bank is now predicting that the global economy will shrink by 2.9 per cent over the coming year, rather than the 1.7 per cent retreat that it forecast earlier this year.